Documente Academic
Documente Profesional
Documente Cultură
0
2011
Paving our Way
Towards
8
Excellence
Annual Report
8
2
0
2011
Paving our Way
Towards
8
Excellence
Annual Report
8
HEALTH SAFETY ENVIRONMENT
Celebrating
50 Years
The journey of a thousand miles
begins with a single step. Atlas
Group took that first step in 1966 to
embark on a momentous journey of
countless achievements, learning
opportunities, struggle, and success.
Fraught with untold obstacles, the
path towards excellence wasn’t an
easy one.
Celebrating
50 Years
The journey of a thousand miles
begins with a single step. Atlas
Group took that first step in 1966 to
embark on a momentous journey of
countless achievements, learning
opportunities, struggle, and success.
Fraught with untold obstacles, the
path towards excellence wasn’t an
easy one.
The Company has a successful track record of growth by focusing on HSE, selling superior quality
products, investing in engineering and development for product development and enhancing the after
sales service network for consumer education.
Group
Structure
The pioneer of Pakistan’s industry, Mr. Yusuf H. Shirazi, laid the foundation of Atlas in 1962 with the
establishment of Shirazi Investments (Pvt) Limited with a capital of half a million rupees and three men
doing business in trading shares and real estate. The Atlas motto coined by him, ‘organization
development through self-development’, has been the essence of success for Atlas.
Today, Atlas is a diversified group dealing in manufacturing, power generation, trading and financial
services, embodying the spirit of development as it endeavors to fuel the growth of Pakistan’s economy.
It comprises of 18 companies, 4 of which are quoted on the Pakistan Stock Exchange. Atlas
shareholders equity and assets stand at over 2 billion US dollars and annual sales approaching 3 billion
US dollars.
With an aggressive focus on development, Atlas is firmly established as the technology and knowledge
leader in Pakistan. Having institutionalized its values and management structure, providing a sense of
active participation at every level, Atlas is driven by the ambition of making Pakistan self-sufficient and
prosperous generation after generation.
The Company has a successful track record of growth by focusing on HSE, selling superior quality
products, investing in engineering and development for product development and enhancing the after
sales service network for consumer education.
Group
Structure
The pioneer of Pakistan’s industry, Mr. Yusuf H. Shirazi, laid the foundation of Atlas in 1962 with the
establishment of Shirazi Investments (Pvt) Limited with a capital of half a million rupees and three men
doing business in trading shares and real estate. The Atlas motto coined by him, ‘organization
development through self-development’, has been the essence of success for Atlas.
Today, Atlas is a diversified group dealing in manufacturing, power generation, trading and financial
services, embodying the spirit of development as it endeavors to fuel the growth of Pakistan’s economy.
It comprises of 18 companies, 4 of which are quoted on the Pakistan Stock Exchange. Atlas
shareholders equity and assets stand at over 2 billion US dollars and annual sales approaching 3 billion
US dollars.
With an aggressive focus on development, Atlas is firmly established as the technology and knowledge
leader in Pakistan. Having institutionalized its values and management structure, providing a sense of
active participation at every level, Atlas is driven by the ambition of making Pakistan self-sufficient and
prosperous generation after generation.
Mission
Ensuring customer satisfaction
through the highest degree of quality
and service with innovation and
dynamic management while meeting
stakeholders’ expectations and
serving as a model corporate citizen.
Values
• Transparency • Meritocracy
• Integrity • Quality
• Safety • Excellence
Mission
Ensuring customer satisfaction
through the highest degree of quality
and service with innovation and
dynamic management while meeting
stakeholders’ expectations and
serving as a model corporate citizen.
Values
• Transparency • Meritocracy
• Integrity • Quality
• Safety • Excellence
Objectives Indicators
Associates • Resources allocated to identifying and meeting training needs of
To develop, update and enhance our associates’ skills, knowledge and associates.
creative potential. • Equip them with modern trainings - local and foreign.
• Dedicate responsibilities with empowerment for confidence
building.
Objectives Indicators
Associates • Resources allocated to identifying and meeting training needs of
To develop, update and enhance our associates’ skills, knowledge and associates.
creative potential. • Equip them with modern trainings - local and foreign.
• Dedicate responsibilities with empowerment for confidence
building.
1966 Incorporation of the Company. 2009 Crossed the one million production milestone in
automotive batteries segment.
1966-1978
1968 Public floatation of shares. 2011 Won the Karachi Stock Exchange (KSE)
Top 25 Companies Award (2007-08 and 2008-09).
1969 Technical collaboration with Japan Storage Battery Co. Ltd., Japan. 2012 Won the Karachi Stock Exchange (KSE) Top 25 Companies Award
(2009-10) for the third year consecutively.
1969 Automotive batteries production started. 2012 Awarded the “Corporate Excellence Certificate” by the
Management Association of Pakistan (MAP).
2013 Won the Karachi Stock Exchange (KSE) Top 25 Companies Award
1974 Motorcycle batteries production started. (2010-11) for the fourth year consecutively.
2013 Awarded the “Corporate Excellence Certificate” by the
1979 Nominated for KSE Top 25 Companies. Management Association of Pakistan (MAP).
1979-1988
2009-2018
2015 First battery manufacturer to launch “Hybrid” battery
1990 Joint Venture was strengthened with Japan Storage under the brand name “Atlas”.
Battery Co. Ltd., Japan with further 5% equity injection. 2016 Awarded the “Corporate Excellence Certificate” by the
1989-1998
1994 PSI Certification (Quality) for automotive batteries. Manangement Association of Pakistan (MAP).
2016 Most Popular brand in Pakistan declared by PakWheels.com
1996 Export of motorcycle batteries.
2017 Company announced six months free warranty of conventional
automotive batteries and one year for hybrid batteries.
1998 Export of automotive batteries.
2017 Won the Pakistan Stock Exchange (PSX) Top 25 Companies Award
(2013-14 and 2014-15) for the seventh and eighth year consecutively.
1998 PSI Certification (Quality) for motorcycle batteries.
2017 Awarded the “Corporate Excellence Certificate” by the
Management Association of Pakistan (MAP).
1999 2nd plant expansion with automatic assembly line.
2017 Best Corporate Report Awards (2015) – ICAP and ICMAP.
2000 ISO – 9002 Certification.
2017 ISO – 9001:2015 certification on Quality Management System.
2000 Best Presented Annual Report Awards – ICAP and ICMAP.
1999-2008
2018 Joint 1st Position – Best Corporate Report Awards (2016) – ICAP and ICMAP.
2001 Best Presented Annual Report Awards – ICAP and ICMAP. 2018 Won the Pakistan Stock Exchange (PSX) Top 25 Companies Award (2015-16)
for the ninth year consecutively.
2003 ISO – 9001 – 2000 E. 2018 Awarded the “Corporate Excellence Certificate” by the Management
Association of Pakistan (MAP).
2006 World Quality Commitment – Paris 2006 Gold. 2018 ISO 14001: 2015 Certification on Environment Management System.
2008 Awarded Brand of the Year Award by 2018 OHSAS 18001:2007 Certification on Occupation Health &
the Prime Minister of Pakistan for being Safety Management System.
No. 1 in Consumer Preference. 2018 Best Corporate Report Awards (2017) – ICAP and ICMAP.
1966 Incorporation of the Company. 2009 Crossed the one million production milestone in
automotive batteries segment.
1966-1978
1968 Public floatation of shares. 2011 Won the Karachi Stock Exchange (KSE)
Top 25 Companies Award (2007-08 and 2008-09).
1969 Technical collaboration with Japan Storage Battery Co. Ltd., Japan. 2012 Won the Karachi Stock Exchange (KSE) Top 25 Companies Award
(2009-10) for the third year consecutively.
1969 Automotive batteries production started. 2012 Awarded the “Corporate Excellence Certificate” by the
Management Association of Pakistan (MAP).
2013 Won the Karachi Stock Exchange (KSE) Top 25 Companies Award
1974 Motorcycle batteries production started. (2010-11) for the fourth year consecutively.
2013 Awarded the “Corporate Excellence Certificate” by the
1979 Nominated for KSE Top 25 Companies. Management Association of Pakistan (MAP).
1979-1988
2009-2018
2015 First battery manufacturer to launch “Hybrid” battery
1990 Joint Venture was strengthened with Japan Storage under the brand name “Atlas”.
Battery Co. Ltd., Japan with further 5% equity injection. 2016 Awarded the “Corporate Excellence Certificate” by the
1989-1998
1994 PSI Certification (Quality) for automotive batteries. Manangement Association of Pakistan (MAP).
2016 Most Popular brand in Pakistan declared by PakWheels.com
1996 Export of motorcycle batteries.
2017 Company announced six months free warranty of conventional
automotive batteries and one year for hybrid batteries.
1998 Export of automotive batteries.
2017 Won the Pakistan Stock Exchange (PSX) Top 25 Companies Award
(2013-14 and 2014-15) for the seventh and eighth year consecutively.
1998 PSI Certification (Quality) for motorcycle batteries.
2017 Awarded the “Corporate Excellence Certificate” by the
Management Association of Pakistan (MAP).
1999 2nd plant expansion with automatic assembly line.
2017 Best Corporate Report Awards (2015) – ICAP and ICMAP.
2000 ISO – 9002 Certification.
2017 ISO – 9001:2015 certification on Quality Management System.
2000 Best Presented Annual Report Awards – ICAP and ICMAP.
1999-2008
2018 Joint 1st Position – Best Corporate Report Awards (2016) – ICAP and ICMAP.
2001 Best Presented Annual Report Awards – ICAP and ICMAP. 2018 Won the Pakistan Stock Exchange (PSX) Top 25 Companies Award (2015-16)
for the ninth year consecutively.
2003 ISO – 9001 – 2000 E. 2018 Awarded the “Corporate Excellence Certificate” by the Management
Association of Pakistan (MAP).
2006 World Quality Commitment – Paris 2006 Gold. 2018 ISO 14001: 2015 Certification on Environment Management System.
2008 Awarded Brand of the Year Award by 2018 OHSAS 18001:2007 Certification on Occupation Health &
the Prime Minister of Pakistan for being Safety Management System.
No. 1 in Consumer Preference. 2018 Best Corporate Report Awards (2017) – ICAP and ICMAP.
Net Sales Gross Profit Profit After Tax respect of their field of work. In addition, the positive and healthy financial status.
Company arranges various academic and
professional courses for its associates Shareholders’ Value
including foreign trainings. The shareholders’ value is increasing year on
year basis which is reflected by healthy return
Rs. Rs. Rs. Quality of Products on equity and strong earning per share.
3,591 10,136 5,654 Quality of products is our main strength,
which is achieved through quality of people,
work and processes. We believe to serve
Net Sales Gross Profit Profit After Tax respect of their field of work. In addition, the positive and healthy financial status.
Company arranges various academic and
professional courses for its associates Shareholders’ Value
including foreign trainings. The shareholders’ value is increasing year on
year basis which is reflected by healthy return
Rs. Rs. Rs. Quality of Products on equity and strong earning per share.
3,591 10,136 5,654 Quality of products is our main strength,
which is achieved through quality of people,
work and processes. We believe to serve
CHINA
KPK
Shareholders
AFGHANISTAN
Peshawar
Islamabad
PUNJAB
Lahore
Faisalabad
Regional Offices
Head of
Managing
Internal
Dealership
Director
Audit
Network
CHINA
KPK
Shareholders
AFGHANISTAN
Peshawar
Islamabad
PUNJAB
Lahore
Faisalabad
Regional Offices
Head of
Managing
Internal
Dealership
Director
Audit
Network
Ordinary Business:
2. To receive, consider and adopt the Audited Annual Financial Statements of the Company for the year ended June 30, 2018
together with the Chairman’s Review, Directors’ and Auditors’ Reports, thereon.
3. To consider and approve the Cash dividend at the rate of 100% (Rs. 10 per share) for the year ended June 30, 2018 as
recommended by the Board of Directors.
4. To appoint auditors and fix their remuneration for the year ending June 30, 2019. The present auditors M/s. ShineWing
Hameed Chaudhri & Co., Chartered Accountants, retire and being eligible, offer themselves for reappointment.
Special Business:
To consider and, if thought fit, pass with or without modification the following resolutions as Special Resolution:
5. To consider and approve the bonus shares issue @ 40% (2 bonus shares for every 5 shares held) for the year ended June
30, 2018 as recommended by the Board of Directors.
5.1 RESOLVED “that a sum of Rs. 69,599,070/- out of Company’s profit be capitalized for issuing 6,959,907 fully paid ordinary
shares of Rs.10/- each as bonus shares to be allotted to those shareholders of the Company, whose names shall appear
in the register of members at the close of business on September 12, 2018 @ 40% in the proportion of 2 ordinary shares
of Rs. 10/- each for every 5 ordinary shares held by a shareholder. The said shares shall rank pari passu with the existing
shares of the Company as regards future dividend and in all other respects.”
5.2 FURTHER RESOLVED “that all the fractional bonus shares shall be combined and the Directors be and are hereby authorized
to combine and sell the fractional shares so combined in the stock market and pay the proceeds of sales thereof, when
realized, to a charitable institution approved under the Income Tax Ordinance, 2001”.
5.3 FURTHER RESOLVED “that the Directors be and are hereby authorized to give effect to the foregoing resolutions and in this
regard to do or cause to be done all acts, deeds and things that may be necessary or required.”
6. To consider and if thought fit to pass the following resolution as special resolution with or without modification to amend its
Articles of association of the company.
6.1 RESOLVED “that the subject to obtaining the requisite approvals, Articles of Association of the Company be and are hereby
altered to bring them in conformity with the Companies Act, 2017 and for that purpose, the revised Articles of Association
of the Company, as initialed by the CEO for the purpose of identification, be and are hereby adopted as Articles of Association
of the Company, in substitution of and to the exclusion of the existing Articles of Association.”
6.2 FURTHER RESOLVED “that the Secretary of the Company or any one of the Director be and is hereby authorized to take
all necessary actions for the purpose to give effect to the above resolution for alteration in the Articles of Association of the
Company and make necessary filings and complete legal formalities as may be required to implement the aforesaid resolution.
A statement under section 134(3) of the Companies Act, 2017 pertaining to the Special Business referred to above is annexed to
this Notice of Meeting.
NOTES:
1. The Share Transfer Books of the Company will remain closed from September 13, 2018 to September 27, 2018 (both days
inclusive). Transfers received in order at the office of our Share Registrar M/s. Hameed Majeed Associates (Private) Limited,
Karachi Chambers, Hasrat Mohani Road, Karachi before the close of business on September 12, 2018 will be considered
in time for the purpose of entitlement for cash dividend and bonus shares.
2. A member entitled to attend and vote at the General Meeting is entitled to appoint another member as a proxy to attend
and vote on his / her behalf. Proxies in order to be effective must be received at the Registered Office of the Company or
at the office of our Share Registrar M/s. Hameed Majeed Associates (Private) Limited not less than 48 hours before the time
of the meeting. A proxy form is attached in the last portion of this report.
3. Any individual Beneficial Owner of the Central Depository Company (CDC), entitled to vote at this meeting must bring his /
her Computerized National Identity Card (CNIC) or passport (in case of foreigner) along with CDC account number to prove
his / her identity and in case of proxy must enclose an attested copy of his / her CNIC or passport. Representatives of
corporate members should bring the usual documents required for such purpose.
4. Members are requested to immediately inform the Company’s Share Registrar of any change in their mailing address.
Members are requested to provide by mail or fax, photocopy of their CNIC or passport (in case of foreigner), unless it has
been provided earlier, enabling the Company to comply with relevant laws.
6. E-Voting Facility
As per Section 132(2) of the Companies Act, 2017, the Company will provide the video link facility to those member(s) who
hold minimum 10% shareholding of the total paid-up capital and resident of city other than Karachi where Company’s Annual
General Meeting is to be placed, upon request. Such member(s) should submit request in writing to the Company at least
seven days before the date of the meeting.
7. E-Dividend (Mandatory)
As per Section 242 of Companies Act, 2017, it is mandatory for the public listed companies to pay cash dividend to its
shareholders only through electronic mode, directly into bank account designated by the entitled shareholders. Therefore,
all shareholders are requested to provide their valid bank account details (if it is not provided earlier) in the “Dividend Mandate
Form”, attached in the last portion of this report at the earliest. Shareholders maintaining shareholding under Central Depository
System (CDS) are advised to submit their bank mandate information directly to the relevant participant / CDC Investor
Account Service.
As per provisions of Sub-Section 2 of Section 244 of the Companies Act, 2017, any dividend and / or share certificate which
are remained unclaimed or unpaid for a period of three years from the date these have become due and payable, the
Company shall be liable to deposit those unclaimed / unpaid amounts with the Federal Government.
As per Finance Act, 2017, following rates are prescribed for deduction of withholding tax on payment of cash dividend by
the companies:
The “Filer” is defined as a taxpayer whose name appears in the Active Tax Payers List (ATL) issued by the FBR from time
to time.
To enable the Company to make tax deduction on the amount of cash dividend @ 15% instead of 20%, all the shareholders
are advised to ensure that their names appear in the latest available ATL on FBR website, otherwise tax on their cash dividend
will be deducted @ 20% instead of 15%.
For any query / information, the investors may contact the Company and / or the Share Registrar at the following:
The corporate electronic shareholders having CDC accounts are required to update their National Tax Numbers (NTN) with
their respective participants, whereas corporate physical shareholders should send copy of their NTN certificates to the
Company or Share Registrar. The shareholders while sending NTN or NTN certificates, as the case may be, must quote
their respective folio numbers, for identification purpose.
In order to enable the Company to follow the directives of regulators to determine shareholding ratio of the Joint shareholder(s)
(where shareholding has not been determined by the Principal shareholder) for deduction of withholding tax on the upcoming
cash dividend of the Company, shareholders are requested to furnish the shareholding details of the Principal shareholder
and the Joint shareholder(s) in the following manner, to the Company’s Share Registrar, enabling the Company to compute
withholding tax on each shareholder accordingly. In case of non-receipt of the information by September 12, 2018, then
each shareholder will be assumed to have equal proportion of shares and the tax will be deducted accordingly.
Shareholding Shareholding
Name and Name and
Proportion Proportion
CNIC No. CNIC No.
(No. of Shares) (No. of Shares)
Pursuant to the SECP Notification vide SRO 470(1)/2016 dated May 31, 2016, the Company in the Extra Ordinary General
Meeting held on May 19, 2017, obtained the approval of the shareholders to circulate the annual audited accounts through
electronic medium, i.e. through CD / DVD / USB at their registered address instead of transmitting hard copies. Accordingly,
the Company has sent its Annual Report 2018 in the form of CD. Financial statements have also been placed on Company’s
website at www.atlasbattery.com.pk. However, shareholders may request the Company Secretary or share registrar of
the Company for transmitting the hard copy of annual audited accounts by filing a ‘Standard Request Form’ available on
Company’s website and the same will be provided at his / her registered address, free of cost, within one week of receipt
of request.
This statement is annexed to the Notice of the Annual General Meeting of Atlas Battery Limited to be held on September 27, 2018
at which certain special business is to be transacted. The purpose of this statement is to set forth the material facts concerning
such special business.
The Board of Directors has recommended to the members of the Company to declare dividend by way of issue of fully paid bonus
shares @ 40% for the year ended June 30, 2018 and thereby capitalize a sum of Rs. 69,599,070/-. The Directors have also
recommended that all the fractional bonus shares shall be combined and the Directors be authorized to combine and sell the
fractional shares so combined in the stock market and pay the proceeds of sales thereof when realized to a charitable institution
approved under the Income Tax Ordinance, 2001.
The Directors are not interested in this business except as shareholders of the Company.
In the light of the Companies Act, 2017, the changes are being proposed in the Articles of Association of the Company to being
them in conformity with the Companies Act, 2017.
Soft copy of the comparative statement of proposed amendments is being sent to the members alongwith This Notice.
The Directors are not interested in this business except as shareholders of the Company.
During the year, the Company has complied with all (ii) For shares held in electronic form
applicable provisions, filed all returns / forms and furnished
all the relevant particulars as required under the To shareholders whose names appear in the
Companies Act, 2017 and allied rules, the Securities and statement of beneficial ownership furnished by CDC
Exchange Commission of Pakistan (SECP) regulations at end of business on September 12, 2018 subject
and the listing requirements. to availability of valid bank account details for
E-dividend.
Share Transfer System
Withholding of Tax & Zakat on Dividend
Share transfers received by the Company’s Share
Registrar are registered within 15 days from the date of As per the provisions of the Income Tax Ordinance, 2001,
receipt, provided the documents are completed in all income tax is deductible at source by the Company,
respects. wherever applicable.
As per Section 242 of Companies Act, 2017 the payment Pursuant to Section 137 of the Companies Act, 2017
of cash dividend through electronic mode has become and according to the Memorandum and Articles of
mandatory. Therefore, all shareholders are advised to Association of the Company, every shareholder of the
provide valid bank account details (if it is not provided Company who is entitled to attend and vote at a general
earlier) in the “Dividend Mandate Form”, attached in the meeting of the Company can appoint another member
last portion of this report, enable the Company to transfer as his / her proxy to attend and vote on his / her behalf.
your cash dividend into your bank account. Shareholders Every notice calling a general meeting of the Company
maintaining shareholding under Central Depository contains a statement that a shareholder entitled to attend
System (CDS) are advised to submit their bank mandate and vote is entitled to appoint a proxy, who ought to be
information directly to the relevant participant / CDC a member of the Company.
Investor Account Service.
The instrument appointing a proxy (duly signed by the
shareholder appointing that proxy) should be submitted
Electronic Certificate of Dividend
at the registered office of the Company not less than
forty eight hours before the meeting.
As per Section 242 of the Companies Act, 2017 together
read with sub Clause 9 of Regulation 4 of Companies
Website
(Distribution of Dividends) Regulations 2017, a listed
company is required to pay cash dividends to its
Updated information regarding the Company can be
shareholders only through electronic mode (i.e.
accessed at www.atlasbattery.com.pk. The website
transferring into the designated bank account of eligible
contains latest financial results of the Company together
shareholders) and an electronic certificate showing
with Company’s profile and product range, etc.
calculation of dividend amount including number of shares
held, total amount, tax and zakat deductions and net
amount credited into the designated bank account of
the eligible shareholder, shall also be made available to
shareholders.
The Company is involved in manufacturing and marketing of automotive, motorcycle and industrial batteries for domestic and
international market and falls in the category of automobiles parts and accessories industry.
Markets
The Company serves various segments including Original Equipment Manufacturers (OEMs), domestic appliances, industrial
equipment and second hand transportation market through a wide range of dealers’ network. Major usage of batteries includes
vehicles, motorcycles, heavy vehicles including tractors, buses, UPS – Uninterrupted Power Supply units, Solar Panels and Gensets
etc.
Legal Framework
The Company is incorporated under the Companies Act, 2017 (formerly: Companies Ordinance, 1984). It is listed on Pakistan Stock
Exchange Limited (PSX) under the listing regulations. The Company adheres to all laws and regulations, as applicable in Pakistan.
The Company is specialized in manufacturing of automotive, motorcycle and industrial batteries. The Company’s products are
mainly categorized in light, medium and heavy batteries for automotive, motorcycle batteries and distill water. The detailed application
of product types and their applications are enlisted in “Others” section of this report.
International Certifications
OHSAS 18001:2007 Occupation Health & Safety Management System Bureau Veritas 2018
Brands
- Atlas
- AGS
The Company is a subsidiary of Shirazi Investments (Private) Limited who hold 58.86% shareholding after merger of Shirazi Capital
(Private) Limited and Shirazi (Private) Limited with and into Shirazi Investments (Private) Limited. Another major shareholder of
the Company is GS Yuasa International Limited – Japan by having 15.00% shareholding.
Atlas Battery share reached at a record high of Rs.890 on July 04, 2017 at Pakistan Stock Exchange Limited (PSX). The market
capitalization at that instant was Rs. 15.49 billion.
The following table shows the monthly high, low and closing share prices of the Company and the volume of shares traded on
the Pakistan Stock Exchange Limited (PSX) during the financial year ended June 30, 2018.
Maket
Highest Lowest Closing No. of shares Capitalization
Months
(Rs.) (Rs.) (Rs.) traded in Value*
(Rs. in bln)
900
800
(Rupees)
500
400
300
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total
Details of shares held by Directors / Sponsors / Executives are given in Pattern of Shareholding.
Directors, Chief Executive and their spouse and minor children 7 2,515 0.01%
Associated companies, undertakings & related parties (Note 1) 4 13,474,962 77.44%
NIT and ICP 5 4,453 0.03%
Banks, DFIs & NBFCs 6 119,685 0.69%
Insurance Companies 4 377,978 2.17%
Modarabas and Mutual Funds 4 61,800 0.36%
Public Sector Companies & Corporations 1 240,566 1.39%
General Public
Local 1,430 2,685,545 15.43%
Foreign - - 0.00%
Others:
Joint Stock Companies 22 428,784 2.46%
Trustee of Iftikhar Shirazi Family Trust 1 1 0.00%
Trustees Al-Bader Welfare Trust 1 3,480 0.02%
1,485 17,399,769 100.00%
Note:
Mutual Funds
• Annual Sales Conference 2016-17 was held on July 01, 2017 at Karachi.
August 2017
• Board of Directors in its meeting held on August 28, 2017 approved the audited annual accounts for the year ended June 30,
2017 and recommended a Final Cash Dividend @ 350% (Rs.35.00 per share) for the year ended June 30, 2017.
• Won the ICAP & ICMAP's Best Corporate Report Awards 2016 with Joint 1st Position in Engineering & Auto Sector on August
25, 2017.
September 2017
• Annual General Meeting was held on September 29, 2017 where audited annual financial statements and cash dividend for the
year ended June 30, 2017, were approved by the shareholders along with appointment of external auditors, M/s. ShineWing
Hameed Chaudhri & Co. for the year ending 2018.
October 2017
• Meeting of Board of Directors was held on October 23, 2017 to consider and approve the quarterly accounts for the quarter ended
September 30, 2017.
• Second stage audit of IMS and OHSAS was completed for all locations in Karachi.
February 2018
• Meeting of Board of Directors was held on February 22, 2018 to consider and approve the half yearly accounts for the half year
ended December 31, 2017.
March 2018
• MD and GMS&BD visited Munich, Germany, from March 23-29, 2018 to attend Pak Suzuki vendor conference.
April 2018
• Meeting of Board of Directors was held on April 26, 2018 to consider and approve the quarterly accounts for the period ended
March 31, 2018.
• To acknowledge the loyalty and dedication of our employees/associates, Family Function and Long Service Award Ceremony was
organized on April 14, 2018 at PAF Museum. Awards Distribution Ceremony was followed by a family gala including several fun
activities for children, dinner and musical night.
June 2018
• Meeting of Board of Directors was held on June 21, 2018 to consider and approve the annual budget for FY 2018-19.
TVC
• Sparkistan song went on-air on leading news and entertainment channels on Independence Day from August 11 to 14, 2017.
• Pakistan Day campaign of Sparkistan II went on-air on major TV Channels from March 21 to 23, 2018.
• AGS TVC was aired on Ten Sports during the complete Pakistan vs. Srilanka and Pakistan vs. West Indies cricket series as
part of media sponsorship.
Radio Shots
• AGS and Atlas Hybrid radio advertisements were aired on all major radio channels.
• Sparkistan song was aired on major radio channels on Independence Day from August 11 to 14, 2017.
• Pakistan Day campaign of Sparkistan II was aired on radio channels from March 21 to 23, 2018.
• Sponsored brand activation and free battery check-up campaign at Pakwheels Auto show in all major cities of the country
throughout the year.
• Brand activation and free battery check-up activity conducted during road shows all across the county.
• Event sponsorship of Special Olympics Pakistan CSR event held on February 18, 2018.
• Comprehensive video tutorials on functioning and maintenance of battery were uploaded on social media and YouTube
Channel.
• Event sponsorship of Annual Learning Conference organized by Pakistan Society for Training and Development (PTSD).
• Corporate Social Responsibility (CSR) Campaign, 'Bring Them Back' was carried out in the month of Ramadan.
• On-ground activation was also carried out in old age homes and orphanages in which a total of 14 old age homes and 2
orphanages were visited across Karachi, Lahore, and Islamabad. Gifts were distributed among the residents and iftar was
arranged for them.
Print Media
• Ear Panel Ads promoting all brands were published on weekly basis in 7 Newspapers.
• Color Advertisment in sports section of “Jang” and “The News” was published every week.
• During the year, the Company built 81 model shops throughout country with a view to standardize all dealer shops. Chief
Executive Officer honored the inauguration ceremony of various model shops.
• After Sales team carried out various training and preventive maintenance programs throughout the year in all major cities of
the country. During the programs, numerous dealers, retailers, technicians of OEMs and end users were in attendance.
Others
• Sparkistan digital campaign continued across all digital platforms of the Company.
Financial Calendar
The Company's financial year starts on July 01 and ends on June 30 of subsequent year.
1st quarter ending September 30, 2018 Last week of October, 2018
Half year ending December 31, 2018 Last week of February, 2019
3rd quarter ending March 31, 2019 Last week of April, 2019
Good Governance
We are committed to act ethically and promote corporate culture from top to bottom for every associate. We encourage honesty
and professionalism in our acts to provide long-term benefits to all stakeholders as a group as well as individually.
We believe in strong customer relationships by ensuring quality of product, quality of management, quality of network, product
innovation and after sales service. Simplified claim settlement is also integral to the Company’s vision to win and build long term
co-operation with customers.
Our major customers are companies and dealers within the transportation or genset industries. The reliability and productivity of
the products are important and in many cases crucial to the customers' business operations. An expansive and effective Sales
and Service network along with customers’ education are of vital importance for the Company.
The ultimate goal of the Company is, to be regarded as number one in customer satisfaction, in terms of both quality products
and superior services.
The Company's vision is to become a leading innovative organization, manufacturing and marketing superior quality automotive,
motorcycle and industrial batteries for domestic and international markets. A deciding factor in fulfilling this vision is our associates’
knowledge and skills. The Company is committed to investing, training, educating and motivating people. Our support to
educational initiatives stems from the idea of strengthening individuals, families and ultimately society through better provision of
education.
The Company's aim is to offer challenging opportunities and unique company culture that helps us attract and retain the best
people. By engaging associates, who are willing to take an active part in the Company’s development and future, the Company
will succeed in pursuing its strategies.
Succession Planning
The Company ensures implementation of succession planning. This is done by development of successors for all key positions
across the organization.
Developing talents
8,875 42.60
33.50 33.94
2013 2014 2015 2015 2017 2018 2013 2014 2015 2016 2017 2018
NSV CAGR over 6 years 15.6% EPS CAGR over 6 years 0.3%
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
To Employees
Salaries & other related costs 1,189,369 5.4 1,146,765 5.5
To Government
Taxes 3,962,240 18.0 4,050,609 19.5
Workers' Profit Participation Fund 44,632 0.2 110,424 0.5
Workers' Welfare Fund 15,918 0.1 32,853 0.2
4,022,790 18.3 4,193,886 20.2
To Providers of Capital
Dividend to Shareholders 173,998 0.8 608,992 2.9
Finance Cost 117,845 0.5 68,170 0.3
291,843 1.3 677,162 3.2
To Society
Donation 20,652 0.1 18,682 0.1
2018
Cost of Materials & Services (71.7%)
To Employees (5.4%)
To Government (18.3%)
To Providers of Capital (1.3%)
To Society (0.1%)
Depreciation & Amortization (1.3%)
Retained Profit (1.9%)
2017
Total non current assets 3,614,419 3,177,574 2,693,424 2,020,578 1,432,965 1,168,802
Current Assets
Stores, spares and loose tools 218,914 191,896 182,314 110,788 88,665 57,818
Stock-in-trade 2,689,010 1,706,859 1,889,810 1,608,783 2,551,256 1,477,258
Trade debts 1,754,311 364,642 119,477 131,810 142,345 79,987
Loans and advances 13,835 5,234 5,561 27,727 25,875 3,497
Deposits and prepayments 16,890 18,231 6,457 11,361 6,416 6,446
Investments 861,921 2,464,851 1,558,861 918,737 824,925 711,544
Other receivables 6,685 3,893 8,840 8,913 11,398 4,121
Sales tax receivable - net 31,739 - - - - -
Taxation - net 547,349 349,166 196,036 481,100 237,060 94,615
Cash and bank balances 381,180 14,873 45,257 78,318 6,089 33,055
Current Liabilities
Trade and other payables 1,643,053 1,305,112 1,172,431 893,670 846,937 790,211
Sales tax payable - net - 65,270 18,057 86,647 55,319 53,488
Accrued mark-up 20,259 4,623 4,392 8,384 19,729 11,110
Short term borrowings 2,459,687 882,770 735,989 709,763 1,622,491 616,691
Unclaimed dividend 34,722 25,798 20,751 16,583 13,410 9,345
Total Equity and Liabilities 10,136,253 8,297,219 6,706,037 5,398,115 5,326,994 3,637,143
Property, plant and equipment 35.4 38.1 39.9 37.0 26.6 31.8 13.7 18.2 34.0 40.8 22.6
Intangible assets - - 0.1 0.2 - - (31.7) (70.0) (54.5) 861.8 (35.7)
Long term loans - - - - - - 35.0 13.1 4.4 (10.1) 86.8
Long term deposits 0.2 0.2 0.2 0.3 0.3 0.3 21.6 14.5 6.3 (1.0) 31.8
Total non current assets 35.6 38.3 40.2 37.5 26.9 32.1 13.7 18.0 33.3 41.0 22.6
Current Assets
Stores, spares and loose tools 2.2 2.3 2.7 2.1 1.7 1.6 14.1 5.3 64.6 25.0 53.4
Stock-in-trade 26.5 20.6 28.2 29.8 47.9 40.6 57.5 (9.7) 17.5 (36.9) 72.7
Trade debts 17.3 4.4 1.8 2.4 2.7 2.2 381.1 205.2 (9.4) (7.4) 78.0
Loans and advances 0.1 0.1 0.1 0.5 0.5 0.1 164.3 (5.9) (79.9) 7.2 639.9
Deposits and prepayments 0.2 0.2 0.1 0.2 0.1 0.2 (7.4) 182.3 (43.2) 77.1 (0.5)
Investments 8.5 29.7 23.2 17.0 15.5 19.6 (65.0) 58.1 69.7 11.4 15.9
Other receivables 0.1 - 0.1 0.2 0.2 0.1 71.7 (56.0) (0.8) (21.8) 176.6
Sales tax receivable - net 0.3 - - - - - 100.0 - - - -
Taxation - net 5.4 4.2 2.9 8.9 4.5 2.6 56.8 78.1 (59.3) 102.9 150.6
Cash and bank balances 3.8 0.2 0.7 1.4 - 0.9 2,462.9 (67.1) (42.2) 1,186.2 (81.6)
Total current assets 64.4 61.7 59.8 62.5 73.1 67.9 27.4 27.6 18.8 (13.3) 57.8
Total Assets 100.0 100.0 100.0 100.0 100.0 100.0 22.2 23.7 24.2 1.3 46.5
53.8 66.1 63.8 59.7 44.8 49.2 (0.4) 28.2 32.8 35.1 33.2
Surplus on revaluation of leasehold land 1.9 2.3 2.9 3.6 3.3 4.8 - - - 11.6 -
Total equity 55.7 68.4 66.7 63.3 48.1 54.0 (0.4) 27.0 31.0 33.5 30.3
Staff retirement benefits 0.7 1.0 1.0 1.1 0.9 1.3 (8.8) 22.2 8.5 21.1 8.5
Deferred taxation 2.5 3.1 3.2 3.9 3.0 4.0 (1.5) 17.5 4.2 29.3 9.6
3.2 4.1 4.2 5.0 3.9 5.3 (3.3) 18.6 5.2 27.4 9.3
Current Liabilities
Trade and other payables 16.3 15.7 17.4 16.5 15.8 21.6 25.9 11.3 31.2 5.5 7.2
Sales tax payable - net - 0.8 0.3 1.6 1.0 1.5 (100.0) 261.5 (79.2) 56.6 3.4
Accrued mark-up 0.2 0.1 0.1 0.2 0.4 0.3 338.2 5.3 (47.6) (57.5) 77.6
Short term borrowings 24.3 10.6 11.0 13.1 30.5 17.0 178.6 19.9 3.7 (56.3) 163.1
Unclaimed dividend 0.3 0.3 0.3 0.3 0.3 0.3 34.6 24.3 25.1 23.7 43.5
Total current liabilities 41.1 27.5 29.1 31.7 48.0 40.7 82.1 17.0 13.8 (33.0) 72.7
Total Equity and Liabilities 100.0 100.0 100.0 100.0 100.0 100.0 22.2 23.7 24.2 1.3 46.5
The increasing trend in property, plant and equipment over the years is mainly due to gradual capacity expansion to meet the
growing demand of the batteries.
Stock-in-trade
The increasing trend in stock-in-trade is in line with increase in cost of goods sold over the years.
Investments
In line with strategic decision to invest excess cash flows with long term perspective to earn differential returns. The investments
have decreased over last year to meet liquidity requirement during the year.
Taxation
The contribution to national exchequer has size ably increased over the years as a result of increase in sales. The current taxation
charge over last year has decreased in line with decrease in profitability.
The increase in trade and other payables over last year mainly comprise of trade creditors and accrued liabilities which are part
of normal course of business.
Short term borrowings during last six years are in line with working capital requirement. Capacity expansion is backed mainly
through funds generated from business.
Sales 100.0 100.0 100.0 100.0 100.0 100.0 6.8 22.5 (12.2) 30.4 37.9
Cost of sales (89.1) (82.7) (80.4) (85.1) (86.8) (85.2) 15.0 26.0 (17.0) 27.9 40.5
Gross profit 10.9 17.3 19.6 14.9 13.2 14.8 (32.5) 7.9 15.6 46.6 23.3
Distribution cost (3.9) (3.5) (3.1) (2.8) (2.4) (2.7) 19.0 38.4 (2.5) 53.7 24.3
Administrative expenses (1.3) (1.8) (2.1) (1.5) (1.5) (2.1) (19.8) 6.1 16.8 29.9 (0.4)
Other income 0.4 1.5 0.7 0.6 0.9 1.0 (70.3) 160.7 4.4 (16.2) 26.5
Other expenses (0.9) (1.0) (1.3) (0.9) (0.8) (1.0) (5.1) (4.7) 21.2 46.2 8.6
Profit from operations 5.2 12.5 13.8 10.3 9.4 10.0 (55.5) 10.0 19.2 41.7 30.0
Finance cost (0.6) (0.4) (0.5) (0.9) (1.0) (0.7) 72.9 (5.2) (51.0) 16.4 110.2
Profit before tax 4.6 12.1 13.3 9.4 8.4 9.3 (59.7) 10.5 26.2 44.8 24.1
Taxation (1.3) (3.4) (4.3) (2.9) (2.3) (2.7) (59.0) (1.5) 28.0 65.8 16.8
Profit after tax 3.3 8.7 9.0 6.5 6.1 6.6 (60.0) 16.2 25.3 36.8 27.2
Sales has witnessed cumulative average growth rate (CAGR) of 15.6% over last 6 years mainly on account of improved demand
in the replacement segment, both in locally manufactured and imported used vehicle categories, coupled with continued demand
for heavy and medium sized batteries used in Uninterruptible Power Supply (UPS) units and generators due to electricity shortage.
Cost of Sales
Cost of sales remained almost consistent except the current financial year. The fluctuation in international commodity prices
results in variation of slight increase and decrease in cost of sales over the last five years. However, in current financial year, a
significant increase was observed in raw material prices resulting in increase of cost of sales to sales percentage.
Gross Profit
Except the current financial year, gross profit margin of last five year remained above 13% reflecting sales volumes increase and
measures to control costs. Last year, the gross profit margin jumped down to 10.9% due to the surge in cost of sales backed
by significant increased rates of raw materials in the international market.
Distribution cost and administrative expenses remained under control and were consistent with the proportion to the sales in last
six years.
Finance Cost
Finance cost is directly correlated to short term borrowings. During the current year, finance cost has increased due to increased
level of running finance utilization. However, effective usage of funded facilities by exercising low rates money market borrowings
has absorb finance cost to some extent.
Company’s profit after taxation (PAT) is lower than the last five consecutive years due to significant surge in major raw material
prices. PAT reported at 60% as against CAGR of 0.3% reported during last five years.
3,000
2,500
2,000
1,500
1,000
500
-
Fixed assets Inventory Investments Trade debts Other assets
5,000
4,000
3,000
2,000
1,000
-
Equity Revaluation Non current Short term Other
surplus liabilities borrowings liabilities
15,000
10,000
5,000
-
2013 2014 2015 2016 2017 2018
- investing activities 231.6 4,731.4 4,401.3 (1,028.3) 1,551.4 2,329.7 159.0 1.2 (95.9) (77.5) (18.6)
- financing activities 266.7 387.9 539.6 (1,500.2) (3,207.2) (553.7) 928.8 33.9 83.5 (225.3) 932.0
Increase / (decrease) in
cash & cash equivalents 100.0 100.0 100.0 100.0 100.0 100.0 1,305.6 8.1 (145.8) 367.9 (78.2)
Net increase in cash flow stood at Rs. 366 million for the year ended June 30, 2018 as compared to net decrease of Rs.30 million
during last year. Brief analysis of cash flows for the year is presented below.
Operating activities
The net cash generated from operations stood at Rs. 1,459 billion as against cash of Rs.1.5 billion generated during last year.
This amount is after adjustment of finance cost of Rs. 102 million and income tax of Rs. 441 million.
Investing activities
The cash flows generated from investing activities was Rs. 848 million as comparison to Rs1,438 million used in last year which
includes net redemption in mutual funds of Rs.1,544 million.
The Company has no long term loans. Short term borrowings are increase by 178.6%.
Ratios
Cash flows from operations to sales ratio decreased from 8.9% to 8.0. The financial leverage ratio at 0.4 times increased from
0.2 times last year whereas interest coverage ratio decreased to 8.1 from 31.3 times.
The Company believes in financing through cash generation from operation rather than long term financing. The working capital
requirement is fulfilled through short term running finance from reputable banks.
Short term running finance stood at Rs. 2,460 million at year end compared to prior year’s Rs.883 million, whereas, letters of
credit lines upto Rs. 1,750 million are available against lien on shipping documents.
The treasury department comprises of skilled and experienced staff to handle day to day treasury function. The team is proficient
and fully capable of managing Company’s needs of financing, working capital adequacy and investments portfolio. The brief
objectives of the team are:
• Manage all aspects of in-house investment portfolios including recommending or benchmarking investment policies and
procedures.
• Identify strategies to drive additional value from surplus cash.
• Assist in identifying measures to evaluate credit quality and impact on finance costs, collateral requirements and market
liquidity.
• Evaluate opportunities to manage or generate value from collections and analyze Company expenditure and spending patterns.
• Identify alternative funding sources.
• Forecast daily cash requirements and execute daily financing decisions.
• Prepare and monitor Company’s various cash flow forecasts and perform financial modeling.
• Utilize low cost financing line primarily and save finance cost, as much as possible.
As stated above, the Company has been generating funds through own operations. Further, the Company has short term running
finance arrangements upto Rs.3.10 billion in case of liquidity needs. An option to redeem investment in mutual funds is also
available to the Company in case of dire need of funds.
Profitability Ratios
Gross profit (%) 10.9 17.3 19.6 14.9 13.2 14.8
Profit before tax (%) 4.6 12.1 13.3 9.4 8.4 9.3
Profit after tax (%) 3.3 8.7 9.0 6.5 6.1 6.6
Return on capital employed (%) 15.9 35.5 40.8 44.2 41.5 41.0
Earnings before interest, tax, depreciation
& amortization (EBITDA) (Rs. in million) 1,245.3 2,395.6 2,149.9 1,788.7 1,281.4 993.0
EBITDA Margin (%) 6.8 14.0 15.3 11.2 10.5 11.2
Operating leverage (%) (819.0) 44.3 (157.9) 137.2 78.9 71.3
Return to Shareholders
Return on equity - before tax (%) 14.7 36.4 41.8 43.4 40.0 42.0
Return on equity - after tax (%) 10.4 26.0 28.4 29.7 29.0 29.7
Return on assets (%) 5.8 17.8 19.0 18.8 13.9 16.0
Earnings per share (basic) (Rs.) 33.94 84.86 73.04 58.27 42.60 40.20
Earnings per share (diluted) (Rs.) 33.94 84.86 73.04 58.27 42.60 33.50
Price earning ratio (Times) 12.1 10.6 8.0 12.1 10.6 8.4
Market price - at year end (Rs.) 410.0 900.0 581.8 703.5 450.0 338.0
Market price - during the year (High - Rs.) 890.0 1,005.0 839.0 965.0 479.0 355.0
Market price - during the year (Low - Rs.) 370.0 590.0 535.0 441.0 288.0 200.0
Break-up value per share without
surplus on revaluation (Rs.) 313.8 315.2 245.9 185.1 137.0 123.4
Break-up value per share with
surplus on revaluation (Rs.) 325.0 326.4 257.0 196.2 147.0 135.4
Dividend
Cash dividend (%) 100.0 350.0 155.0 120.0 100.0 100.0
Stock dividend (%) 40.0 - - - - 20.0
Dividend yield (%) 3.4 3.9 2.7 1.7 2.2 3.6
Dividend cover (Times) 2.4 2.4 4.7 4.9 4.3 3.3
Dividend pay out (%) 41.2 41.2 21.2 20.6 23.5 29.9
Plough back ratio (%) 58.8 58.8 78.8 79.4 76.5 70.1
Dividend yield (Cash) (%) 2.4 3.9 2.7 1.7 2.2 3.0
Dividend cover (Cash) (Times) 3.4 2.4 4.7 4.9 4.3 4.0
Dividend pay out (Cash) (%) 29.5 41.2 21.2 20.6 23.5 24.9
Plough back ratio (Cash) (%) 70.5 58.8 78.8 79.4 76.5 75.1
Asset Utilization
Total assets turnover (Times) 2.0 2.3 2.3 3.0 2.7 2.8
Fixed assets turnover (Times) 5.4 5.9 6.0 9.4 9.5 7.8
Inventory turnover (Times) 6.8 7.2 5.9 6.2 5.1 6.3
Trade debts turnover (Times) 17.3 70.9 111.6 116.4 110.1 92.3
Trade creditors turnover (Times) 11.1 11.5 10.9 15.6 13.0 11.6
Capital employed turnover (Times) 3.1 3.2 3.3 4.9 5.0 4.6
Operating Cycle
Inventory holding period (No. of Days) 54 51 61 59 72 58
Trade debts collection period (No. of Days) 21 5 3 3 3 4
Trade creditors payment period (No. of Days) (33) (32) (33) (23) (28) (31)
Operating cycle (No. of Days) 42 24 31 39 47 31
Liquidity / Leverage
Current ratio (Times) 1.6 2.2 2.1 2.0 1.5 1.7
Quick ratio (Times) 0.9 1.4 1.0 1.0 0.5 0.6
Cash to current liabilities (Times) 0.1 0.0 0.0 0.0 0.0 0.0
Cash flow from operations to sales (%) (8.0) 8.9 11.4 11.9 (3.9) 2.9
Financial leverage ratio (Times) 0.4 0.2 0.2 0.2 0.6 0.3
Total liabilities to equity (Times) 0.8 0.5 0.5 0.6 1.1 0.9
Interest coverage ratio (Times) 8.1 31.3 27.0 11.1 9.1 14.7
10.4
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
581.8
450.0
410.0
338.0
4 5
3 3 3
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
31 31
24
155 140
120 120
100
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
257.2 1.7
1.5 1.6
196.4
147.1
135.4
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Gross profit as a percentage of revenue stands at 10.9% as compare to 17.3% last year. Decline in gross profit margin was
mainly due to increased cost of raw materials, internationally and locally. After tax profits by the Company also down by 60% to
Rs. 591 million from Rs.1,477 million, last year.
The earnings per share stood at Rs. 33.94 per share as compared to Rs.84.86 per share last year. This decrease was a result
of decrease in net profits. This was also reflected in the Company’s break-up value per share which stood at Rs. 325.0 at year
end as compared to Rs. 326.4 of last year.
Dividend
Last year, Company distributed cash dividend @ 350% among its shareholders. This year, the Company has proposed 100%
cash dividend and 40% stock dividend which has resulted in dividend payout of 41.2% and plough back ratio of 70.5% as
compared to 41.2% and 58.8%, respectively of previous year.
Operating cycle
Operating cycle has increased over the last year due to increase in inventory holding and trade debts collection period.
Liquidity / Leverage
The liquidity ratios of this year are declined over the previous period.
The Company’s focus is on expanding market reach, realigning of old lines, automation, health, safety & environment and quality
of products is in line with its vision. For this purpose, continuous investments have been made with simultaneously curbing costs,
sustaining profits, stable return to shareholders, succession planning and satisfied employees. Another, main objective of the
Company is to satisfy its customers by providing after sales services at their doorsteps along with guidance / customer service
through various mediums which may include battery check-up and handling workshops, social media platforms, dedicated
helpline, etc.
Financial Measures
There are various controllable and uncontrollable factors on which Company’s targets are dependent. These factors include
international price of raw materials, fluctuation in foreign currency rates, taxation regime, availability of skilled workforce and
resources, etc. The impact and sensitivity of their fluctuations is considered while setting targets and budgets.
The prices of raw material in international market are utilized for effective inventory management. The planned capital expenditure
is of Rs.1.14 billion will be utilized on upgrading health, safety and environment upto international level and enhanced production
capacity to a competitive level in the industry.
The ongoing sustainability of profits will depend on mix of increased sales, reduced costs and good governance for which senior
management along with associates are committed to deliver.
Non-Financial Measures
Various non-financial measures and indicators are used in lieu of financial measures to gauge the performance of the Company
and set new targets and objectives. Few of the non-financial measures which the Company uses are described below:
The Board of Directors is responsible to formulize strategy and set direction for the Company and CEO and management are
responsible to implement those strategies in the Company and evaluate results there against.
There is no significant change in prospects and performance measures over prior period.
Key Sensitivities
The share price is positively correlated with Company’s financial performance. The factors that influence the Company’s performance
can also be reasonably expected to impact its share price. Following are the few factors prevailing in current business environment
that management considers to be sensitive to the Company’s performance and which may affect its share price.
Demand of automobiles
The country’s economy is highly dependent on agriculture which is the backbone of our country and employs a significant portion
of the population. The agriculture based rural areas consumed a significant portion of motorcycle and heavy vehicles production
of the country thereby leading to high demand of batteries. Therefore, the Company’s performance is strongly linked with the
performance of agriculture sector.
Also the industrial sector serves Pakistan’s economy with a sizeable base. In turn, the demand of heavy machineries and vehicles
increases demand of batteries.
The ongoing crisis in electricity generation and distribution, despite signs of improvement, has prevailed throughout the country
giving rise to alternative sources of electricity including generators, UPS, solar power panels, etc. This has led to increase usage
of batteries.
Political stability
Unstable political climate coupled with the law and order situation disrupts business processes, transportation facilities and supply
chain of the Company.
Plant operations
Stable plant operations allow for higher production and lower per unit cost and wastage. Therefore, smooth operations will add
to profitability of the Company which can positively affect share price. Issues at production facilities negatively affect the financial
performance of the Company and therefore, may also affect the share price.
Exchange fluctuations
The Company is involved in imports of plant, machinery and raw materials. The Company’s exposure in foreign currencies is
sensitive to fluctuations in exchange rates. The depreciation in Pak Rupee affects the performance of Company which is partially
countered by cost controls measures taken by the Company and partially by increase product pricing in the market.
The consistent payout of dividends will reflect the expectations of investors and this affects share price.
Mutual funds
The Company’s liquid investments are placed in open-ended mutual funds. These funds are invested in equity and money market
instruments. The fluctuating trends of stock market and interest rates determine the returns on these funds and as a result, also
affect the Company’s financial performance and thereof the share price.
Economic trends
The events surrounding a specific industry or company make investors watch various economic indicators and general trends
that signal changes in the economy. International oil prices put significant impacts on commodities market, thus prices of raw
materials are correlated therewith.
Investor sentiment
Investor sentiment or confidence can cause the market to go up or down, which can cause stock prices to rise or fall. The general
direction that the stock market takes can affect the value of a stock:
• Bull market – a strong stock market where stock prices are rising and investor confidence is growing. It is often tied to
economic recovery or an economic boom, as well as investor optimism.
• Bear market – a weak market where stock prices are falling and investor confidence is fading. It often happens when an
economy is in recession and unemployment is high, with rising prices.
Return on
Equity
10.4%
Ownership Return on
Ratio ÷ Assets
55.8% 5.8%
Non- Non-
Current Current Total
Current Current
Liabilities
+ Liabilities
Assets
+ Assets Cost – Sales
Rs. 18,332,861
Rs. 4,157,721 Rs. 6,521,834 Rs. 17,742,267
Rs. 323,841 Rs. 3,614,419
Sales 4,628,040 3,754,569 5,037,683 4,912,569 18,332,861 124% 98% 113% 95% 107%
Cost of sales (4,035,807) (3,354,948) (4,597,865) (4,341,863) (16,330,483) 131% 106% 124% 102% 115%
Gross profit 592,233 399,621 439,818 570,706 2,002,378 89% 62% 58% 64% 68%
Distribution cost (177,736) (165,292) (176,594) (201,703) (721,325) 128% 114% 118% 117% 119%
Administrative expenses (62,711) (59,101) (62,613) (60,630) (245,055) 85% 70% 77% 91% 80%
Other income 51,621 34,950 (19,370) 6,787 73,988 82% 24% -66% 38% 29%
Other expenses (102,460) (71,578) 60,896 (46,903) (160,045) 257% 154% -160% 95% 92%
Profit from operations 300,947 138,600 242,137 268,257 949,941 63% 27% 47% 43% 45%
Finance cost (17,695) (35,239) (35,294) (29,617) (117,845) 159% 189% 119% 344% 173%
Profit before tax 283,252 103,361 206,843 238,640 832,096 61% 21% 43% 39% 40%
Taxation (83,165) (40,436) (31,253) (86,648) (241,502) 67% 36% 23% 41% 41%
Profit after tax 200,087 62,925 175,590 151,992 590,594 58% 16% 51% 38% 40%
90%
28% 30% 28% 31% 29% 30% 25% 28%
80%
70%
20%
10%
0%
Sales Sales Gross Profit Gross Profit Profit before tax Profit before tax Profit before tax Profit before tax
2018 2017 2018 2017 2018 2017 2018 2017
I am pleased to present to you the 52nd Annual Report of your Company for the year ended June 30, 2018 together with the
Auditors’ Report.
Economy
Pakistan’s economy has continued to grow at an impressive pace reaching a 13 year high GDP growth of 5.8%. Improvement
in agriculture sector, implementation of CPEC led projects, power generation and strong consumption helped achieve economic
growth. CPI Inflation has remained stable at approximately 5% mainly due to muted food and fuel inflation. On the fiscal front,
FBR collected taxes worth Rs.3,751 billion during FY 17-18, recording growth of 11.4% as compared to corresponding period
last year.
Exports during the current fiscal year were recorded at US$ 24.8 billion witnessing growth of 12.7% from US$ 22.0 billion last
year, whereas imports showed an upward trend of 14.6% at US$ 55.8 billion as compared with US$ 48.7 billion last year.
Resultantly, the deficit in balance of trade was US$ 31.0 billion as against US$ 26.7 last year, up 16.1%. Workers’ remittances
received during FY 2017-18 was US$ 19.6 billion as compare to US$ 19.3 billion last year, up by 1.5%. With the current account
deficit widening and not being fully offset by financial inflows, the foreign exchange reserves fell to US $ 16.4 billion at the end of
FY 2017-18 as compared with US$ 21.4 billion last year. In view of the emerging economic scenario, the State Bank of Pakistan
allowed the Pak Rupee to lose its value by 15.8% against USD from July 01, 2017 till end of FY 2017-18.
Owing to economic concerns, political uncertainty and downgrading of country’s credit rating, the performance of the Pakistan
Stock Exchange (PSX) remained lackluster as PSX 100 index dropped to 41,911 points by June 2018 end, from its peak of
47,241 points during FY 2017-18, touched on August 04, 2017.
Automobile production rose to a record high during FY18, despite domestic capacity constraints. Stability in major commodity
prices, no significant change in inflation rate, expanding road network and low interest rate environment have supported automotive
sector’s growth. Sale of locally manufactured cars witnessed a growth of 16.7% in FY 2017-18 to 216,786 units as against
185,781 units sold in FY 2016-17. Tractors segment witnessed a substantial increase of 28.9 % to 70,887 units as against 54,992
units last year. Trucks and buses had growth of 15.3 % over last year. Sales of motorcycles and three wheelers (of assemblers,
who are registered with PAMA) during FY 2017-18 significantly increased by 18.3% with sales of 1,929,613 units as against
1,630,735 units during same period last year.
Battery Industry
The demand for batteries is correlated with growth in automotive sector and the power shortage in the country. With the
commissioning of new power plants, the power generation capacity has significantly increased, resulting in reduced load shedding,
particularly in urban areas. This has severally affected the demand of heavy and medium sized batteries, used in UPS as a back-up
source of electricity. On the other hand, with the reduction in solar panels cost, their usage particularly in off-grid areas has
propelled, creating a new segment of battery usage, which has augmented the demand of medium and small size batteries.
Battery industry in Pakistan is divided into two major segments; organized and un-organized sectors. The organized sector is
meeting about 90% of the market demand; rest is being met by the un-organized sector and imports. Your Company has a
significant market share and is determined to increase it further by not compromising on quality, introducing innovative products
and providing meaningful after sales service.
FY 2017-18 proved to be another successful year for the Company in terms of top line growth. Your Company achieved sales
of Rs.18.3 billion as compared to Rs.17.2 billion in FY 2016-17, up 6.8%. This increase was mainly due to a strong push to
enhance sales in the replacement market. Significant surge in major material prices forced the cost of sales to grow by 15.0%
from Rs.14.2 billion to Rs.16.3 billion resulting in decline in gross profit ratio which stood at 10.9% as compared to 17.3% in last
year.
Operating expenses at Rs.966 million increased by 5.9% as compared to Rs.912 million in last year. Net loss from investment in
mutual funds stood at Rs.13 million, due to decline in stock market related mutual funds, as compared to net income of Rs.231
million from this avenue in last year. Resultantly, profit from operations decreased to Rs.950 million as compared to Rs.2,133
million last year, down by 55.5%. Finance cost increased to Rs.118 million from Rs.68 million.
Thus, profit before tax of FY 2017-18 was Rs.832 million as compared to Rs.2,065 million in last year, down by 59.7%. After
providing Rs.242 million for taxation, the after tax profit of your Company stood at Rs.591 million as compared to Rs.1,477 million,
down by 60.0%. Earnings per share was Rs.33.94 as compared to Rs.84.86 in last year.
The Board of Directors of the Company complies with all relevant rules and regulations. The Board comprises of well-known
business professionals who add real value to the Board through their expertise, experience and strong value systems. The Board
has laid down policies and procedures that ensure a professional corporate environment that promotes timely disclosure,
accountability, high ethical standards, compliance with applicable laws, regulations and corporate governance.
During the year under review, the Board has effectively discharged its responsibility towards the Company and participated in all
strategic affairs diligently. All quarterly, half yearly and annual financial results were thoroughly reviewed and Board extended its
guidance to the management on regular basis. The Board also played a key role in monitoring of management performance and
focus on major risk areas. Board members also reviewed and approved the Company’s financial budget for FY 2018-19 and
capital expenditures requirement.
To meet the requirement of the “Listing Companies (Code of Corporate Governance) Regulations, 2007” an Independent Director
was appointed as the Chairman of the Audit Committee and Human Resource & Remuneration Committee in March 2018. The
Audit Committee and Human Resource & Remuneration Committee have discharged their responsibilities as per relevant laws
throughout the year. The Board carefully monitors their performance on periodic basis.
Your Company contributed Rs.4.8 billion towards the National Exchequer on account of various government levies, taxes and
import duties during the year under review. Payment of these taxes is 8.1 times more than the net profit after tax of the Company,
which shows the Company’s positive attitude towards development of economy and fulfilling its responsibility as a good corporate
citizen. The total contribution to the exchequer by Atlas Group Companies including your Company is over Rs.55 billion. This
makes Atlas one of the highest taxpayers in the country constituting 1% of Government’s total revenue.
Cash Flows
During the year, cash used in the operations of your Company was Rs.1,459 million as against cash generation of Rs.1,525
million in last year. This was mainly due to funds utilization for working capital, particularly in stocks and trade debts, due to
adverse market conditions. In order to meet the growing market demand, your Company continued to invest in capacity expansion.
Your Company is well equipped with state of the art information technology infrastructure. Your Company is committed to staying
up-to-date in technological advancements with vision to automate manufacturing processes for enhanced productivity and quality.
Your Company is taking full advantage of ERP data management and system and striving for a paperless environment. Your
Company is focused on improving business flow through development and implementation of following programs and processes:
Your Company always follow the Atlas Group motto / philosophy “Organization Development through Self Development” and
made substantial investments for development of its associates to ensure that a continuous learning environment exist within
the Company.
Throughout the year, various initiatives were taken to ensure that associates’ commitment to the organization is enhanced and
they actively contribute to the achievement of individual and business goals.
A corporate culture is maintained that encourages creativity, independence and strengthening of technical and leadership skills.
Your Company prepares selected young and potential associates by offering them the opportunity to attend the Atlas – IBA
Diploma in Business Management, specifically designed for Atlas Group. During the year, several in-house and external trainings
were conducted which covered areas of quality control, health and safety, customer service and their education, leadership skills,
core management skill development and marketing / brand related conferences. Altogether 393 associates benefited from internal
trainings, while 292 associates enhanced their skill set through external training programs / conferences / workshops, amounting
to a total of 633 man days spent on training during the year. Six employees (including CEO) were sent to international trainings
to countries like USA and Japan.
Your Company has a consistent Performance Management Review Process that ensures employees’ performance is fairly
recognized and improved career paths are developed for the talented employees. We have a zero tolerance policy for unethical
business practices or individual behavior.
Your Company is continuously investing substantial resources to improve working conditions for its associates to provide a healthy,
safe and comfortable working environment. State of the art Waste Water Treatment Plant, designed by GS Yuasa (JV Partner),
was installed in the factory premises, which is another milestone towards betterment of the society. During the year, your Company
acquired ISO 14001:2015 Certification on Environment Management System (EMS) and OHSAS 18001:2007 Certification on
Occupation Health & Safety Management System, which are testimony to the management commitment towards HSE Associates’
training and awareness sessions have been regularly conducted to achieve our ultimate goal of “zero incidents and zero injuries”.
During the year, your Company conducted series of fire-fighting sessions at plant; 47 participants benefited from the training.
Emergency evacuation drills were conducted in two phases at factory. First aid training program was also organized at the plant
for 44 participants.
The capacity expansion came on line as per schedule which enabled us to attain increased production leading to growth in sales.
The quality standards were maintained which led to decrease in market claims. Engineering and Development was continually
conducted to bring in innovations and a new variant of Hybrid battery was launched during the year.
Future Prospects
It is anticipated that in FY 2018-19 economic growth will slow down significantly as a weak currency and tighter monetary policy
will suppress the consumption trend. Once the new government is settled and brings necessary reforms in short and medium
term, the economy will regain momentum. The fundamentals are still strong and a clear direction by the new government will
push the economy towards the sustainable growth path in medium and long term.
The battery industry is likely to have a challenging year ahead as the competition will be tougher as due to capacity expansion
by existing battery manufacturers and new entrants. On the other hand, demand of heavy batteries will shrink further due to
reduced load shedding, particularly in urban areas. Profitability in future will also be affected due to increase in prices of basic
raw materials, devaluation of Pak Rupee and inflationary pressure pushing the manufacturing and operating costs higher.
Notwithstanding the challenges mentioned above, your Company has planned substantial capex in the upcoming year. The
investment will not only cater for market demand but improve the 5S and HSE of the Company. Considering the market needs
for innovative products, your Company has introduced several new products including Battery Tonic and Atlas Hybrid. Your
Company will continue to innovate and remain the market leader not only in quality but technological advancement.
The Management is focused on managing costs, maintaining high quality of product and services for improved market penetration
by exploring new territories and export market as well. The improvement in human resource capabilities and value addition for
shareholders is also your Company’s prime focus. I assure you that your Company will continue to focus on productivity and
efficiency while meeting customers’ desire for superior quality by following the principles of “The Atlas Way”.
Acknowledgements
On behalf of the Board of Directors of your Company, I take this opportunity to acknowledge and appreciate the devoted and
sincere services of all associates and management staff of all cadres of the Company.
I would like to thank our JV Partners GS Yuasa International Limited; Japan, Board of Directors, shareholders, bankers, vendors,
dealers, retailers and valued consumers for their continuous support and guidance. I also thank Mr. Ali H. Shirazi; President /
Chief Executive of your Company and the management team for their dedication and commitment to achieve sustained growth
year after year.
Yusuf H. Shirazi
Karachi: August 28, 2018 Chairman
2018 2017
------ (Rupees in ’000) -----
Operating Results
241,502 588,571
Subsequent Appropriations
The directors have recommended a cash dividend of Rs. 10.00 (2017: Rs.35.00) per share and 40% (2017: Nil) bonus shares. Accordingly
the following appropriations have been made:
2018 2017
------ (Rupees in ’000) -----
Appropriations:
Transferred to General Reserve 340,000 870,000
Proposed Cash Dividend @ 100% (2017: 350%) 173,998 608,992
Reserve for issue of Bonus Shares @ 40% (2017: Nil) 69,599 -
583,597 1,478,992
The basic and diluted earnings per share after tax is Rs. 33.94 (2017: Rs.84.86).
Chairman's Review
The Chairman's review included in the Annual Report deals inter alia with the performance and effectiveness of the Board, performance of
the Company for the year ended June 30, 2018 and future prospects. The Directors endorse the contents of the Chairman’s review.
Board of Directors
The Board comprises of one executive and six non-executive directors. All the Directors keenly take interest in the proper stewardship of the
Company's affairs. The non-executive directors are independent of the management of the Company.
Applicable Number of
Executive
Sr. No. Name of Directors No. of Attendance Directorship in
Director
Meetings listed companies
Leaves of absence were granted to those Directors who could not attend some of the Board meetings.
During the year under review, the Company arranged an orientation presentation to the Board in order to apprise them with the
significant changes introduced through the Listed Companies (Code of Corporate Governance) Regulations, 2017. This also
covered changes introduced through Companies Act, 2017 with regards to powers of Board of Directors and disclosure
requirements in financial statements.
Five directors are certified Directors whereas two directors meet the criteria of exemption under clause 20 (2) of the Listed
Companies (Code of Corporate Governance) Regulations, 2017 and are accordingly exempted from directors’ training program.
The details of Directors, who have obtained certification under Directors’ Training program, are summarized below:
4. Mr. Bashir Makki Institute of Cost and Management Accountants of Pakistan 2014-2015
The strategic directions are defined and reviewed by the Board regularly and it sets overall objectives. In light of those objectives,
the Chief Executive sets annual plans and performance targets for business which are reviewed by the Board. The Board is
dedicated to maintain high standard of good corporate governance. The Company confirms compliance with the provisions set
out by the Securities and Exchange Commission of Pakistan and accordingly amended listing rules of the Pakistan Stock Exchange
Limited.
(a) The financial statements, prepared by the management of the Company, present its state of affairs including the results of
its operations, cash flows and changes in equity, fairly.
(c) Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting
estimates are based on reasonable and prudent judgment.
(d) International Financial Reporting Standards, as applicable in Pakistan, have been followed in preparation of financial
statements.
(e) The system of internal control and mitigation of risk are sound in design and have been effectively implemented and
monitored.
(f) There are no doubts upon the Company’s ability to continue as going concern.
(g) There has been no material departure from the best practices of Corporate Governance, as detailed in the listing regulations.
The Board of Directors of the Company is committed to the principles of good corporate governance. This is promoted across
the Company through senior management. The stakeholders expect that the Company is managed and supervised responsibly
and proper internal controls and risk management policy and procedures are in place for efficient and effective operations of the
Company, safeguarding of assets, compliance with laws and regulations and proper financial reporting in accordance with
International Financial Reporting Standards.
The brief report on risk and opportunity duly endorsed by the Board of Directors, covering measures to mitigate risk is annexed
in this report.
Donation
The Company has a policy to donate 1% of its prior year’s profit before tax to a charitable institution. During the year, Company
has donated Rs.20.7 million to Atlas Foundation. Further, the Company has also donated in kind to different non-profit organizations.
The Company contributed Rs.4.8 billion towards the National Exchequer on account of various government levies, taxes and
import duties in the year under review. Payment of these taxes is 8.1 times more than the net profit after tax of the Company
which shows Company’s positive attitude towards economic development as a good responsible corporate citizen.
Code of Conduct
The Company’s Code of Conduct promotes guidelines on various ethical standards including issues such as conflicts of interests,
employee rights, fraud, etc. The Code encourages honesty, integrity and openness in conduct of Company’s operations. The
Code guides interactions with all stakeholders, including consumers, suppliers, shareholders and partners.
The Code is reviewed annually and any changes therein are approved by the Board. The Code is communicated to all associates
and is available on the Company’s website at www.atlasbattery.com.pk/code-of-conduct. The responsibility for day to day
implementation and monitoring of Code is delegated to the senior management.
Audit Committee
Audit Committee assists the Board of Directors in discharging their responsibilities in accordance with the Corporate Governance
and Financial Reporting frame work.
The Committee consists of three members all of whom are non-executive directors. The Chairman of the Committee is an
independent director.
Executive Applicable
Sr. No. Name of Directors Attendance
Director No. of Meetings
As required by Listed Companies (Code of Corporate Governance) Regulations, 2017, Audit Committee also met with external
auditors and Head of Internal Audit in the absence of management. Chief Executive Officer and Chief Financial Officer attended
all the four meetings held during the year, by invitation.
During the year, the Board of Directors has approved the revised terms of references for Audit Committee as required by Listed
Companies (Code of Corporate Governance) Regulations, 2017 and implemented accordingly by the Audit Committee.
Human Resource and Remuneration Committee also assists the Board of Directors in discharging their responsibilities with regard
to devising and periodic reviews of human resource policies and practices within the Company. It also assists the Board in
selection, evaluation, compensation and succession planning of key management personnel.
The annual evaluation of the Board members was carried out in house by the Human Resource and Remuneration Committee.
The key areas of evaluation were as under:
The Committee consists of three members all of whom are non-executive directors. The Chairman of the Committee is an
independent director.
During the year, four meetings of Human Resource and Remuneration Committee were held and attendance was as follows:
Executive Applicable
Sr. No. Name of Directors Attendance
Director No. of Meetings
Management Committee
The Management Committee comprises of senior management headed by Chief Executive, who ensures that a proper system
is developed and implemented across the Company that enable swift and appropriate decision making. It acts in an advisory
capacity to the Chief Executive at the operating level, providing recommendations relating to business and other corporate affairs.
It is responsible for reviewing and forwarding long-term plans, capital and expense budget development and stewardship of
business plans. The Committee is organized on a functional basis and meets monthly to review the performance of each function
against set targets. The Chief Executive also ensures that all decisions and directions given by the Board are properly communicated
and implemented.
The Board of Directors has approved a formal policy for remuneration of executive and non-executive directors depending upon
their responsibility in affairs of the Company. The remuneration is commensurate with their level of responsibility and expertise
needed to govern the Company successfully and to encourage value addition from them.
The Company will not pay any remuneration to independent directors except fees for attending the meetings of the Board and
its committees. Remuneration of executive and non-executive directors shall be approved by the Board, as recommended by
the Human Resource and Remuneration Committee.
The Company operates defined contribution plan for its permanent employees through either one of the following ways:
• voluntary pension schemes managed by Atlas Asset Management Limited, a related party, under the Voluntary Pension
System Rules, 2005, viz. Atlas Pension Fund and Atlas Pension Islamic Fund.
All the newly appointed employees are offered voluntary pension scheme only. However, those employees who are provident
fund trust members have the option to opt for either of two above mentioned defined contribution plans.
The Company also operates non-contributory gratuity fund scheme for its management employees.
The value of investment, based on their respective un-audited accounts as at June 30, 2018 is as follows:
Rupees in Million
Operating and financial data and key ratios of the Company for the last six years are annexed.
Safeguarding of Records
The Company places due emphasis for storage and safe custody of its financial records. The Company is using Oracle ERP
system for recording its financial information. Access to electronic documentation has been ensured through implementation of
a comprehensive password protected authorization matrix. A record retention policy is also in place for proper documentation
and their tracking.
The Directors, executives and their spouse and minor children have made no transactions of the Company’s shares during the
year, except those reported in pattern of shareholding.
Executives mean Chief Executive, Chief Financial Officer, Head of Internal Audit, Company Secretary and other executives (as
defined by the Board).
Material Changes
There have been no material changes since June 30, 2018 to date of the report and the Company has not entered into any
commitment during this period, which would have an adverse impact on the financial position of the Company.
Sustainability Report
Sustainability Report, an integral part of this annual report, besides highlighting various activities carried out by the Company,
has also covered measures taken with regards to Health, Safety and Environment and Corporate Social Responsibility.
The “Statement of Value Addition” and “Risk Opportunity Report” are annexed to this report.
The present Auditors, M/s. ShineWing Hameed Chaudhri & Co., Chartered Accountants, retire and being eligible, offer themselves
for re-appointment. The Audit Committee of the Company has recommended their re-appointment as Auditors of the Company
for the year ending June 30, 2019.
Communication
Communication with the shareholders is given a high priority. Annual, half yearly and quarterly reports are distributed amongst
shareholders within the time specified in the Companies Act, 2017. The Company also has a web site, www.atlasbattery.com.pk
containing up to date information on Company's activities, financial reports and notices / announcements.
Standard of Conduct
Atlas Battery Limited conducts its operations with honesty, integrity and openness, and with respect for human rights and interests
of the employees. It respects the legitimate interests of all those with whom it has relationships.
Atlas Battery Limited is committed to comply with the laws and regulations of Pakistan.
Human Capital
Atlas Battery Limited is committed to create the working environment where there is mutual trust and respect and where everyone
feels responsible for the performance and reputation of the Company.
It recruits, employs and promotes employees on the sole basis of the qualifications and abilities needed for the work to be
performed.
It is committed to safe and healthy working conditions for all employees. We will not use any form of forced, compulsory or child
labor.
It is committed to working with employees to develop and enhance each individual’s skills and capabilities.
It respects the dignity of the individual and the right of employees to freedom of association.
It will maintain good communications with employees through company based information and consultation procedures.
Atlas Battery Limited prohibits discrimination of employees and ensures equal opportunity for employment, compensation,
development and advancement for all individuals. It prohibits harassment based on categories of race, color, religion, sex, national
origin, age or disability.
It does not tolerate workplace violence including threats, threatening behaviour, harassment, intimidation, assaults or similar
conduct.
It has a zero tolerance policy with respect to personal and / or sexual harassment. Personal / sexual harassment in any form is
strictly prohibited and may become ground for immediate dismissal without notice or pay in lieu of notice.
Atlas Battery Limited does not allow any employee to carry firearms or other weapons, unless obtaining prior permission.
The employees must not distribute, possess or use illegal or unauthorized drugs or alcohol on any premises of Atlas Battery
Limited or in connection with its business.
Consumers
Atlas Battery Limited is committed to providing branded products and services, which consistently offer value in terms of price
and quality. Products and services will be accurately and properly labeled, advertised and communicated.
Shareholders
Atlas Battery Limited will conduct its operations in accordance with principles of good corporate governance. It will provide timely,
regular and reliable information on its activities, structure, financial situation and performance to all the shareholders.
Atlas Battery Limited discourages employees and their families from trading in shares of the Company or advise others in trading
of its shares. However, if any employee or his / her family intends to sell or buy or take any position in the shares of the Company,
then he / she should notify in writing to the Company Secretary.
Business Partners
Atlas Battery Limited is committed to establishing mutually beneficial relations with its suppliers, customers and business partners.
In its business dealings, it expects its partners to adhere to business principles consistent with its own.
Community Involvement
Atlas Battery Limited strives to be a trusted corporate citizen and, as an integral part of society, to fulfill its responsibilities to the
societies and communities in which it operates.
Public Activities
Atlas Battery Limited is encouraged to promote and defend its legitimate business interests.
It will co-operate with government and other organizations, both directly and through bodies such as trade associations, in the
development of proposed legislation and other regulations, which may affect legitimate business interests.
It neither supports political parties nor contributes to the funds of groups whose activities are to promote party interests.
The Environment
Atlas Battery Limited is committed to making continuous improvements in the management of environmental impact and to the
longer-term goal of developing a sustainable business. It will work in partnership with others to promote environmental care,
increase understanding of environmental issues and disseminate good practice.
Atlas Battery Limited strives to provide a safe, healthy and clean working environment. It also strives to prevent any wasteful use
of natural resources (including water) and is committed to help in improving the environment. It tries to reduce, replace, recycle
or regenerate articles consumed in its operations.
Innovation
Atlas Battery Limited makes innovations to meet consumer needs. It respects the concerns of consumers and of society. It works
on the basis of sound research, applying high quality standards.
Competition
Atlas Battery Limited believes in fair competition and supports development of appropriate competition laws. Atlas Battery Limited
and employees will conduct their operations in accordance with the principles of fair competition and all applicable regulations.
Atlas Battery Limited does not give or receive, whether directly or indirectly, bribes or other improper advantages for business or
financial gain. No employee may offer, give or receive any gift or payment, which is, or may be construed as being, a bribe. Any
demand for, or offer of, a bribe must be rejected immediately and reported to management.
Its accounting records and supporting documents must accurately describe and reflect the nature of the underlying transactions.
No undisclosed or unrecorded account, fund or asset will be established or maintained.
Conflicts of Interests
All Atlas Battery Limited employees are expected to avoid personal activities and financial interests, which could conflict with
their responsibilities to the Company. They must not seek gain for themselves or others through misuse of their positions.
Company Resources
All the assets of Atlas Battery Limited (both tangible and intangible) shall be deployed for the purpose of conducting the business
for which they are duly authorized for. None of these should be misused or diverted for any personal use or benefit.
Atlas Battery Limited employees shall be alert and vigilant with respect to frauds, thefts or illegal activity committed within the
office. If any such activity comes to their attention, they must immediately report the same to the Head of Human Resource or
Head of Internal Audit.
It has set its priority not to become implicated, in any way, with individuals or firms involved in criminal and other associated
activities and employees are expected to exercise maximum caution in this regard.
Atlas Battery Limited employees must act in good faith, not to misrepresent material facts in books and records or in any internal
or external correspondence, memoranda or communication of any type, including telephone or electronic communications.
Its records should be maintained in such a way that they are in full compliance with all rules, laws and regulations. Adequate
precautions should be taken to protect them from falling into wrong hands, which could harm its business interests. Access to
electronic documentation has been ensured through implementation of a comprehensive password protected authorization
matrix.
Confidentiality
Atlas Battery Limited employees come across a number of confidential information which may take many forms. They must take
proper care of such information and ensure that it is not misused in any way which is detrimental to its business or used for own
commercial benefit. Employees must exercise care to avoid disclosing non-public, internal, secret or proprietary information to
unauthorized persons, either within or outside the Company during employment or afterwards.
Compliance with business principles is an essential element in business success. The Board of Directors of Atlas Battery Limited
is responsible for ensuring that these principles are communicated to, and understood and observed by, all employees.
Day-to-day responsibility is delegated to the senior management. They are responsible for implementing these principles, if
necessary, through more detailed guidance tailored to local needs.
Assurance of compliance is given and monitored each year. Compliance with the Code is subject to review by the Board supported
by Audit Committee of the Board.
Any breach of the Code must be reported in accordance with the procedures specified by the management.
The Board of Atlas Battery Limited expects employees to bring to their attention, or to that of senior management, any breach
or suspected breach of these principles.
Provision has been made for employees to be able to report in confidence and no employee will suffer as a consequence of
doing so.
The Company started to present Sustainability Report few years ago and has evolved through a dynamic process. The preparation
of the Report has led us to identify various areas of improvements and measures to be taken. The Report is based on interviews
and surveys conducted with various stakeholders and identification of issues that need to be addressed. The data presented in
this section is generated by various functional departments which is reviewed by the management and approved by the Board
of Directors.
The Report entails our approach to sustainability which is focused on the principles and fundamentals expressed in ATLAS
CULTURE and ATLAS SYSTEMS. The Report also covers measures taken by the Company towards corporate governance,
environment, financial sustainability, people, quality, health and safety, technology, customer, business ethics and corruption.
The manufacturing of quality products in an environment friendly manner is our aim which help our customers get maximum utility
of our products.
“A business that makes nothing but money is a poor business.” – Henry Ford
We believe that sustainability helps in managing social and environmental impacts whilst remaining a vital component of shareholder,
employee and stakeholder relations. To grow as a Company and corporate citizen of this country, the importance of CSR and
its activities should be realized and worked upon vigorously.
We are continuously working towards implementing CSR, sound governance, best management practices and high economic
and social practices in our day-to-day business activities.
This year, the CSR campaign, 'Bring Them Back' was carried out in the month of Ramadan, during which the Company’s team
carried out on-ground activation in old age homes and orphanages.
Sustainability disclosure can serve as a differentiator in competitive industries and foster investor confidence, trust and employees
loyalty. Analysts often consider a company’s sustainability disclosures in their assessment of management quality and efficiency,
and reporting may provide firms better access to capital.
The environmental shift has diminished quality of life which has implicated that CSR is a long term project based initiative. Through
various activities including donations, collaborated events with non-profit organizations and intense measures to improve the
environment, we are striving to serve to our stakeholders and community at large responsibly.
We work closely with our customers and partners specifically GS Yuasa, Japan to bring technological innovations, foresee change
and adapt accordingly. We welcome competition, face tough business challenges and grow not only as a company but overall
as an industry.
Thank you for taking the time to review this report. We are pleased to share and welcome your feedback and involvement.
Ali H. Shirazi
Karachi: August 28, 2018 President / Chief Executive
The Company’s framework is a product of the Atlas Group’s fundamental business doctrine, the ‘ATLAS WAY’. It comprises of
the principles of “ATLAS CULTURE” and “ATLAS SYSTEMS”. These are a set of rules and procedures which have sustained the
test of time and proved to be at the heart of the Company’s success.
The principles of the ‘ATLAS WAY’ cover all departments, operations, activities and aspects of our business and provide ideal
guidelines for their progressive development. It teaches us to pursue operational and financial results while maintaining environmental
quality, workplace safety and social responsibility.
Atlas Culture
• Corporate Governance
• Respect, recognition and reward (3Rs)
• Recruitment and career advancement based on integrity, merit, experience and skills
• Education and training of staff and descendants
• Self-reliance
• Leading by example
• Humility and excellence
• Living within one’s means, saving for the future and donating for good cause
• To be happy and healthy
Atlas Systems
Environment
The Company’s prime focus is to run operations in a way to reduce negative impacts of its business activities on the environment
by consuming less energy and fuel, produce less waste, recycling water etc. The Company has successfully achieved certification
of ISO 14001: 2015 – Environment Management System from Bureau Veritas.
Material
The Company with its intense research and assistance of Japanese partner works
on procurement of raw materials and development of new formulae and applications
with the aim of low impact on environment. Materials having high impact on the
environment are monitored in pursuance of the Company’s environmental policy.
Over the last few years, Company has introduced new products including Battery
Tonic and Atlas Hybrid battery which has opened up new opportunities. Battery Tonic
is distilled battery water with specific battery grade TDS to increase life of battery.
Atlas Hybrid, a hybrid battery which has been made with combination of lead and
calcium plates with plastic envelop protection giving battery long life and protection
from rust, etc. The successful launch of hybrid battery has now paved way for
introducing same technology in other variants of battery in coming years.
The Company installed 100 KW solar panels which reduced reliance on conventional electrical energy and resulted in cost savings
as well as contribution to improvement of environment.
The cost of fuel for generators was reduced by installation of dedicated electricity lines for uninterrupted supply of electricity and
also resulted in significant reduction of associated greenhouse gas emissions from generators.
Water
Air
Biodiversity
The factory is located in SITE industrial area, away from the protected
areas with low biodiversity value. Despite the location, the Company
recognizes the importance of biodiversity and its impact on nature.
The Company makes continuous efforts to minimize the harmful
impact of discharges and ensures safe disposal of emissions. Efforts
for conservation of biodiversity are undertaken and initiatives are
carried out. A green belt of approximately 35,570 square feet
opposite the factory premises was developed and being maintained
by the Company.
Society
The Company is committed to comply with environmental legislations applicable to all of its Company’s products and operations.
It maintains a system which identifies prevailing and new applicable environmental legislation and includes them to the audit
checklists of respective departments as a guideline and for periodic review. During the year, the Company obtained compliance
certification of EMS 14001:2015 and OHSAS 18001:2007. This will enable the Company to stay ahead of its competitors in
environmental compliance. This is the fruit of significant investments made by the Company in health, safety and environment
since many years.
Financial Health
Our focus is to deliver the best quality batteries with high level of sustainability, efficient manufacturing process and high operating
efficiency. As we gain financial strength, we invest in future products, our people, our communities and society.
Human Capital
Atlas Culture emphasizes on recruitment and career development based on integrity, merit, experience and skills. We invest in
our associates, strengthen their technical capabilities, leadership skills and team work to make Company and society a better
place.
We show respect to our associates and treat them fairly by positively influencing their lives. We teach and encourage them to
serve the Country and Company in the most ethical ways. We believe that happy associates are the backbone of a sustainable
and competitive Company.
Succession Planning
The Company realizes that for long term business continuity, implementation of succession planning is of vital importance. For
this purpose, the Company develops successors for all key positions across the organization as part of succession planning.
Individual Development Plans (IDPs) are prepared to indicate existing and required competencies, learning and development
plans, performance expectation and career progression of each individual. This also contributes towards the retention of potential
employees within the Company.
Based on the importance of succession planning activity, the Company reviews the whole process annually to keep it aligned
with the ongoing changes in the business scenario.
The Company has a career development program which is operated on the basis of Performance Management Review Process
that fairly recognizes employees’ performance and helps develop improved career paths for the talented associates. A corporate
culture is promoted by encouraging creativity and independence among our associates. Through this program, the associates
are required to fill evaluation / performance forms and their supervisors evaluates them on the basis of actual performance
delivered and one-on-one interview with their managers. It leads to establishment of a vision for personal development and a
detailed training plan to achieve it, accompanied by setting their future objectives.
To reach out to talented students and dedicated professionals, the Company is using different social mediums including LinkedIn,
Rozee.pk platform, etc.
The company engaged Mercer to conduct a Desktop study of Total Remuneration Survey so that we could constantly improve
on our Compensation Benefit Policies.
The Company has invested in an ERP system which has integrated and helped in various functions of Human Resources including
recruitment, trainings, career development, payroll processing etc. Currently implementation of Oracle HCM Cloud having seven
modules of HR processes is in process through consultant to further update and strengthen the HRMS.
Trainings
The Atlas Culture specifically emphasizes upon the education and training of staff and descendants. The development of its
associates’ abilities are achieved through various means such as on the job trainings including in-house and external trainings,
education program, financial support for career advancement etc. Technical trainings as well as soft skills trainings have been
arranged during the year such as Advanced Management Program, Emotional Intelligence, Effective Managerial Skills, Managing
Stress, Influencing & Negotiation Skills, Power of Self-Management, Amplifying Presentation Skills, Leadership Skills etc. to name
a few. Apart from this, the Company is part of a comprehensive program with Institute of Business Administration (IBA), through
which the Diploma Program is conducted exclusively for Atlas Group associates which helps in preparing young and potential
leaders for the changing business environment / upcoming challenges.
The Company conducted various in-house trainings and nominated associates for external trainings covering the areas of
production, engineering, quality control, leadership, core management skill development and various specialized departmental
trainings including supply chain management, treasury, corporate affairs, taxation etc. Altogether 393 personnel benefited from
internal trainings, while 292 personnel enhanced their skills set through external training programs, amounting to a total of 633
man days spent on trainings during the year.
Employer Branding
In view of promoting employer branding, beside engineering students, the Company introduced a formal internship training
program for business management students in which ten (10) interns were placed in different divisions like Production, Engineering
& Projects, Marketing, Finance etc. All interns worked on real time projects, hence contributing to their professional development.
The Company also invited Electrical Engineering students from DHA Suffa University and IBA Family Business Diploma students
on industrial visits to the plant that provided practical insights into the real working environment of the industry. A liaison has been
maintained with the relevant universities so that they continue to develop professionals / talent who are not only competent but
also familiar with our organization's practices, systems and structure.
Human Rights
Further, it has been a big challenge for the entire industry to attract women in numbers. The Atlas Group has a long-term ambition
to increase the number of women in executive teams, while taking into account all other important diversity parameters.
Employee Engagement
The Company encourages work and life balance, and strictly emphasizes to follow stipulated working hours and avoidance of
late sittings. This has helped our associates to avoid unnecessary stress, pay appropriate attention when needed and to keep
themselves away from health problems.
To acknowledge the loyalty and dedication of our employees/associates, Family Function and Long Service Award Ceremony
was organized on April 14, 2018 at PAF Museum. Chairman Atlas Group, Mr. Yusuf H. Shirazi was the chief guest of the event
which was well attended by the family members of ABL associates, GEC Members and MC Members of other Group Companies.
Long Service Awards Distribution Ceremony was followed by a family gala including several fun activities for children, dinner and
musical night.
Achievements
ABL achieved 3rd prize for ‘Best HRM Practices’ in the category of Large
National Companies from Australian High Commission to Pakistan, H.E.
Margaret Adamson at Annual International HRM Conference hosted by
Employers Federation of Pakistan.
Atlas Battery placed a heat stroke camp nearby office during the holy
month of Ramadan, which was visited by the senior management of the
company.
Hajj Facility
Every year, the Company sends one of its associates for Hajj through ballot
and bears all expenses pertaining to this religious offering.
The focus and direction of the committee is mitigation of risk to the minimal
levels by carrying out business and operational activities in such a way to
ensure the safety of its employees and other persons for whom it is
responsible, and at the same time the risk to the environment. The
Company strives to provide a safe and healthy working environment for
its employees and acts positively to prevent injury, ill health, damage and
loss arising from its operations.
We consider the fact that safety precedes everything. We believe that all
injuries are preventable and can be avoided if due care is taken before
hand. We have established "zero incidents and zero injuries" as our goal.
We follow-up and investigate on all incidents and injuries to address their
root causes. We ensure that ‘close-calls’ are reported so that we learn
from these near misses and focus on improvement.
• Protect and strive for improvement of the safety, health and security
of our people at all times.
• Ensure that all associates understand their specific HSE responsibilities,
implementing all the necessary measures for the prevention, protection
from hazards to associates and the property.
During the year, various activities were conducted and initiatives taken in relation to implementing and enduring workplace safety
and to educate associates about health and safety. These activities and initiatives included:
• ABL acquired HSE Certification, Integrated Management System comprised of (OHSAS 18001:2007 & ISO 14001:2015)
• Behavior Based Safety (BBS) Program was initiated in order to improve the safety Culture of the Organization and helped in
managing a process that creates a safety partnership between management and employees that continually focuses people's
attention and actions on theirs, and others daily safety behavior.
• At Source segregation mechanism was introduced for which different color bins were installed and after collection all hazardous
waste were treated through 3rd Party Environmental Protection Agency (EPA) approved contractors.
• Secondary containments were installed in order to prevent the land contamination through chemicals subsequently spills kits
were made available for timely cleanup of spilt materials.
• In-House HSE Inspection Audits were commenced in order to highlight the issues persist on the shop floor.
• UA/UC reporting mechanism has been introduced which is helping in identifying the real time hazards of the shop floor.
• To promote and reinforce the safety culture, Safety Week was conducted twice at the factory in which different internal and
external trainings were conducted. To bring awareness at associates’ level, different safety posters / signage were placed in
the entire factory, emphasizing on the importance of safety measures to be taken while being at work.
• Emergency evacuation drills were conducted in two phases at factory.
• Dissemination of information regarding health and safety to associates and workers through awareness sessions.
• Installation of dust collectors and scrubbers.
• Conducted series of firefighting training sessions at plant including associates from other offices as well. This was an in-house
activity and 47 participants benefited from the training making 23.5 man days.
First aid training program was also organized for 44 participants at the plant through Aman Foundation so that the capability of
our people to handle emergency during work could be improved and they can prevent such situations from becoming worse. It
was a half day training program thus making 33 man days.
Administration
To ensure that our associates stay healthy, positive and contribute well to the achievement of organization’s objectives, the
Company has spacious canteen with all associated services. The dining hall of the canteen serves around 460 people at a time
that includes serving breakfast, lunch, dinner and tea to all associates.
Centralized Time Management System, Time machines were installed at all regional and zonal offices across Pakistan.
Medical Facility
The Company has established an in house medical facility to deal with associates’ daily health care needs, and also for any
emergency situation occurring at the factory premises. The in-house clinic is manned by a qualified doctor, who is available in
general shift and paramedics, who are available for 24 hours, 7 days a week. An ambulance is also in service at factory premises
to cater any emergency situation.
With the rapid change and advancement of technology, we realize the importance to keep ourselves align with the advancements
and continue to innovate and invest in technology. The focus is on process automation and paperless environment to not only
increase synergies but also as part of global environment protection and reduced cost while maintaining high quality.
The Company enjoys a state of the art information technology infrastructure to meet the growing needs of the business. This
includes innovations and improvements in core business processes (manufacturing and assembly lines) and non-core business
processes (supply chain, finance, etc.). We are also aligning business and IT to attain full advantage in a significant and persistent
way for data management through ERP and striving for a paperless environment. Further, we are focused on B2C (Business to
Customer), Business Continuity Plan (BCP), Business Process Reengineering (BPR), B2B (Business to Business) systems, IT
Security and Safety, HCM Cloud and superior Communication environment.
The Company has successfully implemented material resource planning (MRP) module of Oracle EBS. Developing a comprehensive
dashboard of management information system (MIS) comprising of operational and non-operational divisional reporting is in
progress.
The Company has a comprehensive Disaster Recovery Plan to cater any disaster emergency situation. The Company also
engaged a professional firm for an independent review of its Disaster Recovery Planning & Business Continuity Plan and identified
the points of improvements.
The Company is committed to the manufacturing of high quality Lead Acid and low maintenance Hybrid batteries. The system
has been designed, improved and aligned as per ISO 9001:2015 guidelines. The Quality Management System demonstrates
Company’s ability to provide quality products, meet customer needs, improvement of the processes and continuous monitoring
on consistent basis.
The Company has an in-house laboratory equipped with latest measuring equipment for testing the performance of batteries
through chemical and electrical testing. Our laboratory is also capable of testing every product, from raw material to finished
batteries.
Customer
Customer Satisfaction
Customer satisfaction is always our top priority. During the years, the Company has took various initiatives in order to satisfy
customers’ needs, which included developing a Service and Business Development division to meet the growing needs of our
customers, their training of battery handling and preventive maintenance, mobile van, free battery checkup service, etc. We
believe, customer service and service levels continues to be an area for improvement, which we will work on constantly. In addition
to this, the Company has also taken an initiative of free home battery check-up service activity.
To meet the customer needs is our top priority and helps us in improving our products and services accordingly besides innovation
of new products with advance technology, accordingly to their utility and benefit.
All activities related to advertising and sales promotion are adhered to comply with the applicable laws as well as business ethics
and code of conduct which are monitored in-house. The marketing activities during the year are summarized in media section.
The Company not only believes in high quality products but also keenly focuses on after sales service and to build long term
relationship with the consumers. To attain confidence of its consumers, the Company’s representative including Chief Executive
regularly visit to dealers’ showroom and meet with customers. On the other hand dealers, retailers and OEMs technicians training
on battery specs and handling method are part of our business practices.
We believe in giving transparency of what we offer, fair treatment and effective complaint system to consumers. We educate our
consumers by giving them battery management tips, safety tips and tips to select type of battery etc. We also meet our dealers
regularly to enable two way communication to obtain their suggestions, to have feedback of market reputation of our products,
to educate them with the use of technology which includes our B2C system etc.
Battery Capacity
This year, the Company has started to display capacity of batteries expressed in "Ampere Hour(s)" (AH) and “Voltage" (V) on all
products, their packaging, warranty cards, instructional manuals and other advertisement material to enable the customers take
better buying decision according to their need.
Tips for battery management and safety are provided in each battery pack and also available on Company’s website.
Tips regarding how to select a battery and FAQs are also placed on our website for consumer guidance.
The Company is committed to the generally agreed ethical codes for marketing its products. When preparing marketing
communication and advertising material, the legislative and regulatory compliance of the content is always checked and confirmed
before publication. The Company ensures that advertisements must be clear and concise, portray business ethics and in simple
language which is used at large by general public.
There have been no incidents of non-compliance with regulations and voluntary codes concerning marketing communications,
including advertising, promotion and sponsorship except one instance which is mentioned in the audited financial statements as
annexed at latter part of this report.
Market Share
Battery industry in Pakistan is divided into two major segments; organized and un-organized sectors. The organized sector is
meeting about 90% of the market demand; rest is being met by the un-organized sector and imports. Exact market share cannot
be determined / ascertained as there is no official association of battery industry through which data is compiled and published
publicly.
Dealers’ Network
We continuously focus on expanding our dealer network and improve efficiency of existing dealers by conducting auto electrician
workshops, providing incentive schemes for improving their trade and B2C networking, etc.
July 2017
• Dealers' meeting in Karachi held on July 03, 2017 at ABL Karachi office and dealers’ get together held on July 06, 2017 for
the induction of new Zonal Sales Manager in Islamabad at ABL Islamabad office.
August 2017
September 2017
• Dealers’ meetings held in Karachi, Lahore, Rawalpindi and Multan Zones on September 6, 14, 15 and 27, 2017 respectively.
• Conducted 21 trainings sessions for AMB commercial dealers and 6 training sessions for OEMs. Total 230 AMB technicians
and 160 MCB technicians were trained.
October 2017
• Brand activation and free battery check-up at the Pakwheels Auto Show in Sialkot and Islamabad on October 15 and 29,
2017 respectively.
• Dealers' meetings were held in Karachi (October 06, 2017), Faisalabad (October 17, 2017), Lahore (October 18, 2017) and
Rahim Yar Khan (October 20, 2017).
November 2017
• Brand activation and free battery check-up at the Pakwheels Auto Show in Lahore on the November 12, 2017.
• Dealers' meetings were held in Karachi (November 07, 2017), Islamabad (November 21, 2017) and Lahore (November 22,
2017) at Atlas DHA office, Mona hotel Islamabad and PC hotel Lahore respectively.
• Inauguration of 3 model shops at Abbottabad, Mirpur AJK and Chakwal on November 8, 9 and 10, 2017 respectively.
December 2017
• Wall Calendar distribution in all zonal and regional offices for the dealers.
• Dealers / retailers get together arranged at Rawalpindi, Multan, Sahiwal, Lahore and Karachi.
• B2C training session for Rawalpindi and Lahore dealers held December 22 and 23, 2017 respectively.
• Half yearly sales conference 2017-18 was held on January 10, 2018 at Pearl Continental Hotel Bhurban.
• Dealers’ meetings were held in Karachi, Rawalpindi, Lahore, Faisalabad and Multan.
February 2018
• Pak Wheels Auto-shows were held in Multan and Bahawalpur on February 9 and 14, 2018 respectively.
• Retailers get together were arranged in Karachi, Okara, Hyderabad, Bahawalpur and Faisalabad.
• Service department conducted 56 trainings of AMB and MCB, attended by 478 technicians nationwide.
March 2018
• Road show activation started from March 12, 2018 from Hyderabad covering a total of 42 cities till end of April 2018.
• Service department conducted 49 training programs during the month covering 391 technicians across the country.
April 2018
• Road show activation continued in the month of April 2018, covering a total of 42 cities.
• Dealer meetings were arranged in Islamabad, Lahore, Faisalabad, Karachi, Peshawar, Multan and Rahim Yar Khan.
May 2018
• Dealers’ meetings were arranged in Karachi, Lahore, Faisalabad, Sahiwal, Multan and Rawalpindi.
• Participated in free battery check-up campaign organized by Honda Atlas Cars (Pakistan) Limited at fifteen 3S dealerships
showrooms in Karachi, Multan, Islamabad and Lahore regions. Approximately 1,846 vehicles were checked during the activity
by service support staff. Six dealers also added in CMS (Claims Management System) network.
June 2018
• Service team conducted 23 trainings across Pakistan, attended by 70 technicians, including OEMs’ and dealers’ staff.
• Participated in free battery check-up campaign organized by Honda Cars at 2S dealerships in Karachi, Sukkur, Multan,
Islamabad and Lahore regions. Approximately 309 vehicles were checked during the activity from June 25 to 28, 2018.
The Company has a separate division for supply chain function with suitable and skilled resources which integrates with other
business units for effective management of Company’s operations. It encompasses production planning, material procurement,
logistics, warehousing and store supplies management. It also manages vendors and suppliers and in built that code of conduct
and business ethics are followed.
During the year under review, the Company contributed over Rs.4.8 billion to the national exchequer on account of various
government levies, taxes and import duties. The Company’s positive attitude towards development of economy and fulfilling its
responsibility as a good corporate citizen is clearly reflected from the above statistics. Together with other Atlas Group Companies,
the total contribution to the exchequer is over Rs. 55 billion. This makes Atlas one of the highest taxpayer in the country with
1.0 % of Government’s total revenue.
The Company has adopted Atlas Group policy to donate 1% of its prior year’s profit before tax to a charitable institution. During
the year, Company has donated Rs.20.7 million to Atlas Foundation. Further, the Company has always supported and played a
significant role in CSR activities. This year, Company launched the CSR campaign during Ramadan, by highlighting the importance
of taking care of your parents. The campaign also included activation in 14 old age homes, where the team spent time with old
age residents and distributed presents. Another part of the Ramadan CSR campaign was activities that were done at orphanages.
Another 200 children were given gifts and puppet shows were organized for them. The company also sponsored Special Olympics
Pakistan Marathon as the Gold Sponsor. Atlas Battery setup a stall with a magic mirror activity for the special children. CEO and
the team participated in the Marathon. In addition, the company sponsored fund raising concert that was organized by Professional
Education Foundation.
The term “Corporate Governance” refers to a system of Company’s management that focuses on responsibility, transparency and
sustainable value creation. It encompasses the management and monitoring system of the Company, including its organization, business
principles and guidelines, as well as internal and external control and monitoring mechanisms.
The governance and control of Atlas Battery Limited is carried out through number of corporate bodies. At the general meetings, the
shareholders can exercise their voting rights as mentioned in statutory laws.
The Board of Directors is ultimately responsible for organization and monitoring of the Company’s operations. The duties of the Board
are partly exercised through Audit Committee and Human Resource and Remuneration Committee.
In addition, the Board is responsible to appoint the CEO of the Company. The CEO is in-charge of the daily management of the Company
in accordance with guidelines and instructions provided by the Board.
Division of responsibilities and duties between the shareholders, the Board and the CEO are regulated inter alia by the Companies Act,
2017, the Company’s Articles of Association and the Listed Companies (Code of Corporate Governance) Regulations, 2017.
Shareholders
As on June 30, 2018, the Company had 1485 shareholders according to the share register. The Company’s share registrar is Hameed
Majeed Associates (Private) Limited.
The Company believes in protecting the interest of its investors. It acknowledges its responsibility to inform shareholders, analysts
and investors timely and fully about material developments that are relevant to the Company, its management, operations and financial
situation as well as its future prospects. The policy is devised to establish guidelines for communicating with shareholders, analysts,
investors and other stakeholders for their understanding of entity’s business, governance, financial performance and prospects. A
well-defined structure for governance and management which provides specific authority and responsibility for policy implementation
is in line with the policy.
Company Secretary has been designated as the person responsible for handling investor grievances and feedbacks. The mechanism
is summarized below:
• A designated email address has been created namely abl@atlasbattery.com.pk to facilitate investors in submitting their queries,
grievances and feedbacks.
• In addition to the aforementioned email address, complaints and suggestions can also be received in writing, duly addressed
to the Company Secretary.
• All queries, grievances and feedbacks are resolved and communicated to the investors on timely basis after due verification
procedures.
Stakeholders’ Engagement
The stakeholders’ expectations are carefully understood by the Company and responded to as a responsible manufacturer, marketer,
employer and corporate citizen. The engagement serves the purpose to actively engage with stakeholders, know their expectations,
build a relationship with them and respond appropriately with the aim to win their loyalty with the Company.
Dealers and Provide innovative partnerships Site visits Product quality and
consumers for sustainable growth Questionnaires safety
Provide quality products at Dealers related events Business ethics
good value Sales conferences Human rights
Prompt after sales service Service and warranty centers Renewable technology
Competitive prices Website Service at doorstep
B2B Research
Customer satisfaction survey
Shareholders and Generate sustainable growth Interim and annual reports Corporate governance
investors and shareholders' return Meetings Business performance
Improve shareholders capital Website Corporate responsibility
Improve financial performance Timely reporting
Industry partners Improve business practices Active involvement in Long term industry
Build capacity within our organizations and associations challenges
organization and drive peer e.g. PSX, ICAP, MAP, etc. Human rights
approaches Health and safety
An Extraordinary General Meeting (EOGM) of Shareholders is convened wherein the Board of Directors considers any matter requiring
the approval of Company’s shareholders in general meeting, or if the shareholders who control one tenth shareholding demand in
writing for the consideration of a certain issue.
The Annual General Meeting (AGM) decides on, among other things, the adoption of the financial statements contained therein, the
distribution of profits and the discharge of the Members of Board and the CEO from liability. In addition, the AGM elects the Members
of the Board and the auditors, and decides on the remuneration paid to the auditors. The AGM, furthermore, may decide on,
amendments to the Articles of Association, share issues, etc. as required by laws and regulations prevailing in the country.
Atlas Battery Limited’s Annual General Meeting 2017-18 was held on September 29, 2017 in Karachi. The shareholders adopted
inter-alia the following resolutions:
• Minutes of the Extraordinary General Meeting held on May 19, 2017 be and are hereby confirmed and signed.
• Annual Audited Accounts for the year ended June 30, 2017 along with the Directors’ and Auditors’ Reports thereon be and are
hereby adopted.
• Cash dividend @ 350% (Rs.35.00 per share) be and is hereby approved for payment to those shareholders of the Company,
whose names shall appear in the register of members at the close of business on September 14, 2017.
• Secretary of the Company or any one of the Directors be and is hereby authorized to give effect to the foregoing resolutions and
in this regard to do or cause to be done all acts, deeds and things that may be necessary or required.
• Retiring Auditors M/s. ShineWing Hameed Chaudhri & Co., Chartered Accountants being eligible, be and are hereby re-appointed
as Company’s Auditors for the year ending June 30, 2018 for an audit fee of Rs.1,200,000/-.
The overall performance of the Company including Company’s growth, industry growth, capex incurred during the year, financial
costs, future prospects etc. were discussed by the shareholders.
2. Board of Directors
The Board of Directors is responsible for the appropriate arrangement of the Company’s administration and operations. The Board
of Directors consists of minimum of seven members elected by a General Meeting of Shareholders. The Board of Directors elects
a Chairman among its members. The Board of Directors’ tasks and responsibilities are determined primarily by the Companies Act,
2017, the Company’s Articles of Association, the Listed Companies (Code of Corporate Governance) Regulations, 2017 and other
legislation and regulations applicable to the Company. It is the responsibility of the Board of Directors to act in the interests of the
Company and all of its stakeholders.
• devise overall corporate and business strategies and gives direction to the Company’s management.
• oversee the performance of the management periodically.
• ensure that professional standards and corporate values are put in place in the form of Code of Conduct.
• define and review vision and mission of the Company and evaluate performance there against.
• ensure the system of corporate governance exist.
• review the internal controls and risk management policies and approve its governance structure and code of conduct.
• recommend the matters to be dealt with by a General Meeting and to ensure that the decisions made by a General Meeting are
appropriately implemented.
• approve policies, large business agreements, investments decision and declaration of dividend etc.
• directs and supervises the Company’s executive management.
• appoint and dismiss the CEO, decides CEO’s remuneration and other benefits and
• monitoring the financial reporting process and the efficiency and strength of the Company’s internal control, internal auditing and
risk management and compliance systems.
The Board discharges its responsibilities through their meetings including quarterly meetings which include approval of budgetary
planning and business strategy. The Board has constituted various committees for the performance of their functions.
The General Meeting confirmed that the Board of Directors shall have seven members.
The personal information of Members of the Board is presented at the start of this report.
Directors’ Qualification
The Board members have diversified experience and are qualified professional. They are well conversant of the laws and business
practices in Pakistan. They have ample experience from various sectors and brought in their expertise and knowledge to the
Company. They are also well aware of the importance of mandatory trainings and evaluation as per the Listed Companies (Code
of Corporate Governance) Regulations, 2017.
The Board determines its working procedures and reviews these procedures as required. The working procedures describe the
Chairman’s specific role and tasks, as well as responsibilities delegated to the committees appointed by the Board. The Chairman’s
role is primarily to guide long term strategic planning for the Company including:
• Presiding over the Board and ensuring that all relevant information has been made available to the Board.
• Defining the Company’s philosophy and objectives.
• Safeguarding shareholders’ interest in the Company.
• Responsible for building the Company’s image nationally and internationally.
• Ensuring the appropriate recording and circulation of the minutes of the Board to directors and officers entitled to attend Board
meetings.
• Major spokesman of the Company, responsible for liaison with the senior most levels of Federal and Provincial Governments.
• Overseeing the Company’s macro approaches and public relations in the broadest sense, including its relations with public
organization and other companies and
• Commitments and de-commitments of strategic investments.
Conflicts of Interest
Directors have a duty to avoid a situation in which they have or can have a direct or indirect interest which conflicts, with the interests
of the Company. In this regard, the directors have undertaken that they will comply with the related provisions of the Companies
Act, 2017, the Listed Companies (Code of Corporate Governance) Regulations, 2017 and rules and regulations of SECP and stock
exchange and Company’s Code of Conduct.
The evaluation of Board’s role of oversight and its effectiveness is a continual process which is appraised by the Board itself. A
detailed Board Evaluation Questionnaire has been formulated which is circulated amongst directors for their feedback every year
and compiled results are presented in the Board meeting for review and appropriate action, thereon.
The remuneration of the Board members is approved by the Board itself. However, in accordance with the Listed Companies (Code
of Corporate Governance) Regulations, 2017, it is ensured that no directors take part in deciding their own remuneration.
For information on remuneration of directors and CEO in 2017-18, please refer to the financial statements.
Every director upon joining is provided with an orientation presentation. CEO briefs new directors about the Company operation,
industry dynamics, organization structure and other significant matters.
Board meetings
There were five Board meetings held during the year. All of them were held inside Pakistan.
The CEO handles the operational management of the Company in accordance with direction set by the Board. He is responsible
to the Board of Directors for fulfilling the targets, plans and goals that the Board sets. The CEO is responsible for ensuring that the
Company’s accounting is in compliance with the law and that financial management has been arranged in a reliable manner. The
CEO forms the Functional Committees and Management Teams and delegates to its members the necessary powers for carrying
out their responsibilities.
• Marketing
• Production
• Supply Chain
• Quality Assurance
• Engineering and Projects
• Services and Business Development
• Human Resource
• Information Technology
• Finance
• Corporate Affairs
The CEO is responsible for all matters pertaining to the operations of the Company. His responsibilities include:
• To formulate Company’s objectives in conjunction with the strategy approved by the Board.
• To lead and oversee the implementation of the Company’s long and short term plans in accordance with its strategy.
• To build and maintain amicable relations with governmental departments, trade associations, regulatory bodies, customers,
suppliers and sales offices.
• To ensure the achievement of agreed productivity and profitability targets.
• To ensure that the chain of command is clear in the Company to facilitate the maintenance of discipline, ambit of all managers
is clearly defined to ensure accountability.
• To prepare for the approval of the Board annual forecast of plans for productions, sales, profit, revenue and capital expenditure,
manpower which fit into the long term business objectives and the overall strategic direction of the Company.
• To ensure that necessary coordination exists between various divisions of the Company to achieve smooth and effective operations.
• Maintain a regular review of duties and functions of the staff to ensure that there is no duplication of efforts in office methods and
procedures and that all operations are carried out efficiently and economically.
• To ensure that the Company’s interest and assets are properly protected and maintained and all the required government
obligations are compiled.
• To chalk out human resource policies for achieving high professional standards, overall progress / betterment of the Company
as a whole.
• To ensure that proper succession planning for all level of hierarchy exist in the Company and is constantly updated.
• To pay all government dues, on or before due dates and obtain all refunds due form the government.
• To prepare and present personally to the Board of Directors following reports / details.
• annual business plan, cash flow projections, forecasts and strategic plan.
• budgets including capital, manpower and overhead budgets, along with variance analyses.
• quarterly operating results of the Company as a whole and in terms of its operating divisions or business segments.
• promulgation or amendment to a law, rule or regulation, enforcement of an accounting standard and such other matters
as may affect the company.
• To ensure that any show cause, demand or prosecution notice received from revenue or regulatory authorities are properly
responded to.
• To resolve disputes with labor and their proposed solutions, any agreement with the labor union or collective bargaining agent
and any charter of demands on the listed company.
• To ensure that open, progressive and game free atmosphere is created among associates giving them a sense of participation
and providing them with an opportunity to give their best.
• To ensure that every associate is treated equally as an individual regardless of designation, career development is purely on merit
basis and each associate is helped to develop pride of performance through continuous study and training so as to form a team
in which all levels of associates work together with common goals to strengthen the position of the Company.
The performance of the CEO is formally appraised through the evaluation system which is based on achieving quantitative and
qualitative targets, set at beginning of the year. It includes performance of the business, accomplishment of objectives with reference
to profits, organization building, succession planning and corporate success. The Human Resource and Remuneration Committee
appraise the performance of CEO along with the determination of remuneration which is then recommended to Board for their
approval, on annual basis.
To ensure objective control, the Board has established Audit Committee and Human Resource and Remuneration Committee to
oversee relevant areas of the Company’s operations.
Audit Committee
This Committee reviews the financial and internal reporting process, the system of internal controls, management of risks and the
internal and external audit processes. An independent internal audit function reports to the Committee regarding risks and internal
controls across the organization. The Audit Committee receives reports from external auditors on any accounting matter that might
be regarded as critical. The detailed Charter of the Audit Committee developed in accordance with the Code of Corporate Governance
is contained in the listing regulations of the stock exchange which is summarize below:
The Audit Committee has reviewed the quarterly, half yearly and annual financial statements, besides the internal audit plan, material
audit findings and recommendations of the internal auditor.
Human Resource and Remuneration Committee was established by the Board to assist the Directors in discharging their responsibilities
with regard to selection, evaluation, compensation and succession planning of key management personnel. It is also involved in
recommending improvements in Company’s human resource policies and procedures and their periodic review. The Committee
consists of three members. All members of the Committee are non-executive directors. The Chairman of the Committee is an
independent director.
5. Auditors
The Company’s auditor is an auditing firm which fulfills general competency requirements and also complies with relevant legal
independence requirements guaranteeing the execution of an independent and reliable audit. They are also compliant with the Code
of Corporate Governance and other applicable laws and regulations. The performance, cost and independence of the external
auditor is reviewed by the Audit Committee and recommended to the Board. Annual General Meeting then elects the auditor to
audit the accounts for the financial year and the auditor’s duties ceases at the close of the subsequent Annual General Meeting. The
auditor’s duty is to audit financial statements and give reasonable assurance that the financial statements give a true and fair view
of the Company’s operations and result as well as its financial position. The Company’s auditor presents the audit report required
by law to the Company’s shareholders in connection with the annual financial statements and reports regularly to the Board of
Directors.
All directors and associates are required to comply with all applicable laws and regulations.
Code of Conduct
The Code emphasizes on honesty, integrity and openness in conduct of Company’s operations. It strictly abides all stakeholders to
follow the laws and regulations. It also promotes guidelines on various ethical standards including issues such as conflicts of interests,
employee rights and grievance, fraud etc. The Code guides interactions with all stakeholders, including consumers, employees,
suppliers, shareholders and partners.
The Code is disseminated to all associates and is placed on Company’s website. It is reviewed annually and any changes therein
are approved by the Board.
The Company investigates all alleged breaches of Code and applies appropriate measures when complaints turn out to be
substantiated. An open dialogue is promoted on integrity with a formal “Whistle Blowing Policy”. The associates of the Company
are encouraged to report their views on bad processes and unethical practices through such policy. These mechanisms are part of
the complaints procedure and are described in our Code of Conduct. In 2017-18, no alleged breaches of the Code of Conduct
were reported.
IT Governance Policy
IT Governance Policy of the Company is monitored and update periodically. The policy deals with the use of information and its
delegation and authority, security and modes and mediums of dissemination etc. The Company’s focus is on strong processes and
systems in order to protect the stakeholders’ data and create awareness about the importance of data protection and privacy
through IT Governance Policy, which is summarized below:
• Members of Management Committee are responsible for required compliance in their respective functional areas, at all locations.
• The General Manager IT is responsible for its implementation, maintaining compliance and for suggesting new areas as per technology
enhancement.
The Company is striving to become paperless in coming years, by getting all the records scanned and uploaded on servers for later
use and retrieval. The Company has an efficient Record Management System to safeguard records of the Company from the time
such records are conceived through to their eventual disposal.
A team known as Record Management Committee is made specifically for the purpose of implementation of record management
policy.
• Having Centralized Record Room with proper shelves, fire resistant lockers, etc.
• Full time dedicated record keeper who is responsible to maintain Centralized Record Room in proper manner.
• Centralized electronics record facility.
• Retention of electronic mail policy.
• Compliance on Records Retention Policy.
• Records retention period.
• Mode of retention.
• Records disposal.
The Company values an open dialog on integrity and responsibility with its associates. The Company is committed to provide a fair
environment to its employees. The Company investigates all alleged breaches of Code and applies appropriate measures when
complaints turn out to be substantiated. The associates of the Company are encouraged to report their views on processes and
practices to their manager. These reporting mechanisms are part of the complaints procedure and are described in our Code of
Conduct.
This policy applies to recruitment and selection, terms and conditions of employment including pay and benefits, communications,
training, promotion, transfer and every other aspect of employment.
Violations reported through the whistle blower procedure are investigated by internal audit function. Information regarding any
incident is reported to the Audit Committee. Reports include measures taken, details of the responsible Company function and the
status of any investigation. In 2017-18, no alleged breaches of the Code of Conduct were reported.
Our Code of Conduct states our principles for good business ethics with underlying values to conduct business operations with
honesty, integrity and openness, and with respect for human rights and interest of the associates. The Company’s Code of Conduct
promotes guidelines on various ethical standards including issues such as conflicts of interests, employee rights, fraud, etc.
All forms of corruption whether directly or indirectly are discouraged that include but not limited to bribery, kickbacks, payoff, etc.
The stern action is taken against personnel found in these mal-practices. It is the responsibility of all associates to ensure that none
of Company’s associates engage in practices which infringe legal or regulatory requirements. Any associate engaging in business
practices which infringe legal or regulatory requirements are subjected to disciplinary action which may lead to dismissal and personal
criminal or civil liability.
The associates are encouraged to report any infringement or suspected infringement of legal or regulatory requirements involving
associates of the Company.
Objectives Risk Category Major Business Risks Sensitivity Mitigating factors /actions in place
Market
To be market Strategic Risk Continued inflation reducing Enhance internal efficiencies to
leader in battery customer purchasing power. provide the right product at the
industry. right price
Commercial Risk Variation in raw materials and
other input costs led by oil prices
causing uncertainty.
Credit Risk
To minimize credit Financial Risk The financial loss to the In certain situations the Company
risk. Company if a customer fails to extends credit after due
meet their contractual obligation consideration of factors which
arising from trade receivables. includes market sentiments,
seasonal effects, etc. A
comprehensive credit policy is
already in place.
Investment
To maximize Financial Risk Adverse stock market The Company has investment in
returns on developments may affect mutual funds and maintains
investments. revaluation of assets. diversified portfolio to mitigate risk.
Internal Controls
To have strong Operational Risk The Company may be exposed Internal controls covering areas of
internal controls to financial irregularities resulting governance, management, policies
leading to sound in qualitative and quantitative and procedures, compliance with
and stable losses in the absence of laws and regulations etc. are in
Company effective internal controls. place. Internal Audit department
monitors the compliance of internal
controls.
Socio-political
situation
To operate in a Commercial Risk Compliance of new and existing A team of qualified and
stable market with laws and regulations. experienced professional in the
least volatility and management team ensures
low occurrence of Political uncertainty may affect compliance with all laws, rules and
unforeseen business volume. regulations.
variables.
Technology
To evolve Operational Risk Technology shift may render Constant process of balancing,
technologically in production process obsolete modernization and up gradation of
order to and cost inefficient. production facilities.
manufacture
products of high
quality.
Operations
To ensure Operational Risk The severe on-going energy Company operations have an
continuity of crisis. alternative energy source.
operations without
disruptions. Vendors' operational / financial Continuous assessment of all
constraints and their vendors in terms of quality,
deteriorating quality standards. operational and financial capacities.
Human Resource
Recruitment and Operational Risk Qualified and competent staff Well-structured procedures for
career may not be available in sufficient recruitment, training,
advancement numbers. compensation, periodic appraisals
based on integrity, and succession planning have
merit, experience Operations may be subject to been implemented to ensure staff
retention and continued operation.
and skills. fraudulent activities.
Finance
To be financially Financial Risk Devaluation of Pak Rupee Foreign currency exposure is
strong and perform against foreign currencies may monitored by the Treasury
up to the adversely affect Company's department. Derivatives such as
expectations of all financial performance. forward covers and currency
stakeholders. options (when available) are used
for hedging against currency
devaluation when considered
necessary, as and when deemed
feasible.
Increase production capacity
leading to high material and Liquidity is monitored by the
supplies' orders and costs Treasury department in cooperation
making liquidity and cash flows with Supply Chain. Further, cash
stressed. management facilities from various
banks have been availed for quick
realization of sales revenue.
Strategic Risk: These risks are related to the business environment including the industry and are beyond Company’s control.
Commercial Risks: These risks emanate from commercial substance of the organization and involve decisions which may affect Company’s
position in the market.
Operational Risks: These risks are related to Company’s internal operations, administrative procedures and daily affairs.
Financial Risks: These risks are related with financial matters including profitability, financing, liquidity and credit.
• Increasing commodities prices may impact raw materials and other input costs.
• Extending credit to the customers.
• Widening gap of trade balance and increase current account deficit.
• Inflation prevailing in the country and budgeted for the upcoming years.
• Pak Rupee parity against foreign currencies.
• Stock market fluctuations.
• Political uncertainty and law & order situation may affect business volume.
• Energy supply in country.
The management considers various factors including but not limited to all departments authority levels, best practices and all applicable
laws & regulations to mitigate the risks stated above.
The Audit Committee comprises of 3 non-executive directors and Chairman of the Committee is an independent director. The Audit
Committee reports the following after an annual review of the Company’s operations:
• Four meetings of the Audit Committee were held during the year 2017-18 and presided by the Chairman, attendance of which is
as follows:
As required by the Listed Companies (Code of Corporate Governance) Regulations, 2017, Audit Committee also separately met with
external auditors without the representation of management. Chief Executive Officer and Chief Financial Officer attended all the meetings
held during the year, by invitation.
• The Audit Committee appointed a secretary of the Committee who is Head of Internal Audit. The secretary circulated the minutes
of meetings of the Audit Committee to all members, directors, CEO and CFO prior to the next meeting of the Board.
• The Audit Committee reviewed quarterly, half yearly and annual financial statements of the Company and recommended for approval
of the Board of Directors.
• The Company’s Code of Conduct has been disseminated and placed on Company’s website.
• Appropriate accounting policies have been consistently applied. All core and other applicable International Accounting Standards
were followed in preparation of financial statements of the Company on a going concern basis, for the financial year ended
June 30, 2018, which present fairly the state of affairs, results of operations, cash flows and changes in equity of the Company.
• The CEO and the CFO have endorsed the financial statements of the Company before presented to the Audit Committee and
Board of Directors. They acknowledge their responsibility for true and fair presentation of the Company’s financial condition and
results, compliance with regulations and applicable accounting standards and design and effectiveness of internal control system
of the Company.
• Accounting estimates are based on reasonable and prudent judgment. Proper and adequate accounting records have been
maintained by the Company in accordance with the Companies Act, 2017 and the external reporting is consistent with management
processes and adequate for shareholders’ needs.
• The Audit Committee has reviewed the related party transactions and recommended for approval of the Board of Directors.
• The Company’s system of internal controls is designed to mitigate and eliminate the risk of not achieving business objectives, and
can provide reasonable assurance against material misstatement or loss.
• Ascertained that the internal control systems including financial and operational controls, accounting systems for timely and
appropriate recording of purchases and sales, receipts and payments, assets and liabilities and the reporting structure are adequate
and effective.
• The appraisal of Head of Internal Audit was jointly done by the Chairman of the Audit Committee and the Chief Executive Officer.
Internal Audit
• The Board has effectively implemented the internal control framework through an in-house Internal Audit function, which is suitably
qualified and experienced for the purpose and are conversant with the policies and procedures of the Company.
• Internal Audit facilitate a risk assessment process in each key business area and support function to review the significant risks
facing its operations and to record the relevant controls and any actions in place to mitigate the risks. The materiality of the risk is
measured based on financial and non-financial criteria, and the probability of the risk arising is also mapped. The detailed assessments
are then consolidated to provide input into the Company’s risk assessment. This process also enables Internal Audit to engage
with senior management throughout the business on risk monitoring and management.
• Audit Committee has reviewed the annual internal audit program and the consideration of findings of internal audit and management’s
response. Further, it approved the internal audit plan for 2018-19.
• Coordination between the external and internal auditors was facilitated to ensure efficiency and contribution to the Company’s
objectives, including a reliable financial reporting system and compliance with laws and regulations.
External Audit
• The statutory auditors of the Company, M/s. ShineWing Hameed Chaudhri & Co., Chartered Accountants, have completed the
audit of financial statements of the Company for the year ended June 30, 2018 and review of the “Statement of Compliance with
the Listed Companies (Code of Corporate Governance) Regulations, 2017” for the year ended June 30, 2018.
• The Auditors have been allowed direct access to the Audit Committee and the effectiveness, independence and objectivity of the
Auditors has thereby been ensured.
• The Audit Committee has reviewed and discussed points of improvements highlighted by the external auditors.
• The Audit Committee has reviewed the Management Letter of 2016-17 which was issued within 30 days of the date of the Auditors’
Report on financial statements as required under the listing regulations and discussed with the external auditors and management.
• The Audit Committee reviewed performance, cost and independence of the external auditors, M/s. ShineWing Hameed Chaudhri
& Co., Chartered Accountants and has recommended to the Board their reappointment for the year ending June 30, 2019.
The Company has complied with the requirements of the Regulations in the following manner:
3. The Company encourages representation of independent non-executive directors and directors representing minority
interests on its Board. At present, the Board includes:
Category
Sr. No. Name of Directors
Independent (2) Non-Executive (4) Executive (1)
1. Mr. Yusuf H. Shirazi √
2. Mr. Ariful Islam √
3. Mr. Azam Faruque √
4. Mr. Bashir Makki √
5. Mr. Frahim Ali Khan √
6. Mr. Toru Furuya √
7. Mr. Ali H. Shirazi √
4. The directors have confirmed that none of them is serving as a director in more than five listed companies, including this
Company (excluding the listed subsidiaries of listed holding companies where applicable).
5. The Company has prepared a “Code of Conduct” and has ensured that appropriate steps have been taken to disseminate
it throughout the Company along with its supporting policies and procedures.
6. The Board has developed a Vision and Mission statement, overall corporate strategy and significant policies of the Company.
A complete record of particulars of significant policies along with the dates on which they were approved or amended has
been maintained.
7. All the powers of the Board have been duly exercised and decisions on relevant matters have been taken by the Board /
shareholders as empowered by the relevant provision of the Companies Act, 2017 (Act) and the Listed Companies (Code
of Corporate Governance) Regulations, 2017 (Regulations).
8. The meetings of the Board were presided over by the Chairman and in his absence, by a director elected by the Board for
this purpose. The Board has complied with the requirements of Act and Regulations with respect to frequency, recording
and circulating minutes of meeting of Board.
9. The Board of directors have a formal policy and transparent procedure for remuneration of directors in accordance with the
Act and Regulations.
10. The Board has arranged a presentation for the directors in order to appraise them with the significant changes introduced
through the Listed Companies (Code of Corporate Governance) Regulations, 2017. This also covered changes introduced
through Companies Act, 2017 with regards to powers of Board of Directors and disclosure requirements in financial
statements. The incoming directors are also provided provide with appropriate briefing and orientation material to enable
them firsthand knowledge on the working of the Company. Five directors are Certified Director and two directors meet the
criteria of exemption and are accordingly exempted from directors’ training program, thereby 100% compliance of code of
corporate governance has been achieved.
12. Chief Financial Officer and Chief Executive Officer duly endorsed the financial statements before approval of the Board.
13. The Board has formed Committees comprising of members given below:
a) Audit Committee;
• Mr. Azam Faruque – Chairman
• Mr. Bashir Makki – Member
• Mr. Frahim Ali Khan – Member
14. The terms of reference of the aforesaid Committees have been formed, documented and advised to the Committee for
compliance.
15. The frequency of meetings (quarterly/half yearly/ yearly) of the Committee were as per following:
a) Audit Committee
• 1st Meeting : within one month of end of quarter.
• 2nd Meeting : within two months of end of half year.
• 3rd Meeting : within one month of end of quarter.
• 4th Meeting : within two months of end of year.
17. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the quality
control review program of the Institute of Chartered Accountants of Pakistan (ICAP) and registered with Audit Oversight
Board of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the
Company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines
on code of ethics as adopted by the ICAP.
18. The statutory auditors or the persons associated with them have not been appointed to provide other services except in
accordance with the Act and regulations or any other regulatory requirement and the auditors have confirmed that they
have observed IFAC guidelines in this regard.
19. The ‘closed period’, prior to the announcement of interim / final results, and business decisions, which may materially affect
the market price of Company’s securities, was determined and intimated to directors, employees and stock exchange.
20. Material / price sensitive information has been disseminated among all market participants at once through stock exchange.
21. We confirm that all other requirement of the Regulations have been complied with.
The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our responsibility is to
review whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of the Regulations
and report if it does not and to highlight any non-compliance with the requirements of the Regulations. A review is limited primarily
to inquiries of the Company's personnel and review of various documents prepared by the Company to comply with the Regulations.
As a part of our audit of the financial statements we are required to obtain an understanding of the accounting and internal control
systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider whether the Board
of Directors' statement on internal control covers all risks and controls or to form an opinion on the effectiveness of such internal
controls, the Company's corporate governance procedures and risks.
The Regulations requires the Company to place before the Audit Committee, and upon recommendation of the Audit Committee,
place before the Board of Directors for their review and approval its related party transactions and also ensure compliance with
the requirements of section 208 of the Companies Act, 2017. We are only required and have ensured compliance of this requirement
to the extent of the approval of the related party transactions by the Board of Directors upon recommendation of the Audit
Committee. We have not carried out procedures to assess and determine the Company's process for identification of related
parties and that whether the related party transactions were undertaken at arm's length price or not.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not
appropriately reflect the Company's compliance, in all material respects, with the requirements contained in the Regulations as
applicable to the Company for the year ended June 30, 2018.
We have audited the annexed financial statements of Atlas Battery Limited (the Company), which comprise the statement of financial
position as at June 30, 2018, and the statement of profit or loss and other comprehensive income, the statement of changes in equity,
the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting
policies and other explanatory information, and we state that we have obtained all the information and explanations which, to the best
of our knowledge and belief, were necessary for the purposes of the audit.
In our opinion and to the best of our information and according to the explanations given to us, the statement of financial position,
statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows together
with the notes forming part thereof conform with the accounting and reporting standards as applicable in Pakistan and give the information
required by the Companies Act, 2017 (XIX of 2017), in the manner so required and respectively give a true and fair view of the state of
the Company's affairs as at June 30, 2018 and of the profit and other comprehensive loss, the changes in equity and its cash flows for
the year then ended.
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of
Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of Pakistan (the Code) and we have fulfilled
our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements
of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
S.No. Key Audit Matter How the matter was addressed in our audit
The Companies Act, 2017 (the Act, 2017) promulgated Our audit procedures in respect of this area included:
on May 30, 2017. The Act, 2017 revised and replaced
the Fourth Schedule of the Companies Ordinance, 1984 Obtained an understanding of the related provisions and
and brought changes in the presentation and disclosures schedules of the Act, 2017 applicable to the Company and
of the financial statements by elimination of duplicative prepared document to assess the Company's compliance
disclosures with IFRS disclosure requirements and with the disclosure requirement of the Act, 2017.
incorporation of significant additional disclosures. These
changes are applicable first time to the Company's We discussed the applicable changes with the Company's
financial statements for the year ended June 30, 2018. management and those charged with governance as to
whether the Company is in compliance with such changes.
The changes are considered as a key audit matter
because failure to comply with the requirements of the We also maintained a high level of vigilance when carrying out
Act, 2017 could have financial and reputational impact our other audit procedures for indication of non-compliance.
on the Company.
We ensured that the financial statements have been prepared
Refer note 2, 6, 7, 14.4, 21, 22.2.1, 28.4, 34.2, 36.1, in accordance with the approved accounting standards and
41, 43, and 44 for changes in disclosures made through the Act, 2017.
the Act, 2017.
2. Trade Debts
The Company's trade debts have been increased Our audit procedures in respect of this area included:
significantly from Rs.364.64 million at June 30, 2017,
to Rs.1,754.31 million at June 30, 2018. During the We obtained the revised credit policy and checked its approval
current financial year due to competitive forces, the from the Board. We also obtained credit limits of individual
management revised its credit limits for the dealers by dealers and compared with dealer balances as at June 30,
extending credit sales to its selected dealers within the 2018, to assess the Company's compliance of individual
approved limits. We identified this area as key audit dealers’ credit limits;
matter because trade debts is a material balance for
the Company and estimating the recoverable amount We sought external confirmations from the selected debtors
involves inherent uncertainty. of their balances that remained outstanding at the year end
and compared replies to the request.
Refer note 3 and 14 of the financial statements.
We performed subsequent check of selected debtor balances
to review recovery from debtors after the year end.
Information Other than the Financial Statements and Auditor’s Report Thereon
Management is responsible for the other information. The other information comprises of Chairman's Review, Directors' Report,
Company's Corporate Information, Shareholders' Information and Financial Highlights (but does not include the financial statements
and our auditor’s report thereon).
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting and
reporting standards as applicable in Pakistan and the requirements of Companies Act, 2017 (XIX of 2017) and for such internal control
as management determines is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either
intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Board of directors are responsible for overseeing the Company’s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs as applicable in Pakistan will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As parof an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the board of directors with a statement that we have complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with the board of directors, we determine those matters that were of most significance in the audit of
the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
a) proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX of 2017);
b) the statement of financial position, the statement of profit or loss and other comprehensive income, the statement of changes
in equity and the statement of cash flows together with the notes thereon have been drawn up in conformity with the Companies
Act, 2017 (XIX of 2017) and are in agreement with the books of account and returns;
c) investments made, expenditure incurred and guarantees extended during the year were for the purpose of the Company’s
business; and
d) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company and
deposited in the Central Zakat Fund established under section 7 of that Ordinance.
The engagement partner on the audit resulting in this independent auditor’s report is Raheel Ahmed.
Non-current assets
Current assets
Authorised capital
50,000,000 (2017: 50,000,000) ordinary
shares of Rs.10 each 500,000 500,000 500,000
Revenue reserves
General reserve 4,697,500 3,827,500 2,827,500
Unappropriated profit 589,307 1,483,462 1,276,794
5,286,807 5,310,962 4,104,294
Capital reserve
Surplus on revaluation of leasehold land 21 193,886 193,886 193,886
Liabilities
Current liabilities
Other comprehensive loss for the year - net of tax (5,757) (262)
1,277,826 2,206,941
(2,508,228) (79,060)
Increase in current liabilities
- Trade and other payables 329,651 139,564
- Sales tax payable - net - 47,213
329,651 186,777
(2,178,577) 107,717
Net cash (used in) / generated from operating activities - carried forward (1,458,876) 1,525,082
Net cash (used in) / generated from operating activities - brought forward (1,458,876) 1,525,082
Net cash generated from / (used in) investing activities 848,334 (1,437,598)
Net cash generated from / (used in) financing activities 976,849 (117,868)
Cash dividend for the year ended June 30, 2016 at the
rate of Rs.15.50 per share - - (269,696) - (269,696)
- - 1,476,364 - 1,476,364
Balance as at June 30, 2017 - as restated 173,998 3,827,500 1,483,462 193,886 5,678,846
Cash dividend for the year ended June 30, 2017 at the
rate of Rs.35 per share - - (608,992) - (608,992)
- - 584,837 - 584,837
Atlas Battery Limited (the Company) was incorporated as a public limited company on October 19, 1966 and its shares are
quoted on Pakistan Stock Exchange Limited. The Company is engaged in manufacturing and sale of automotive and motorcycle
batteries & allied products. The registered office is located at D-181, Central Avenue, S.I.T.E., Karachi. The manufacturing
facilities of the Company are located at S.I.T.E., Karachi with branches at Karachi, Lahore, Multan, Islamabad, Faisalabad,
Sahiwal, Peshawar and Sukkur.
The Company is a subsidiary of Shirazi Investments (Private) Limited, which holds 58.86% of issued, subscribed and paid-up
capital of the Company as at June 30, 2018.
Capital expenditure
During the year, the Company incurred major capital expenditure as part of its continuing plan for capacity expansion. This is
reflected in note 7.1.
Credit policy
Refer note 14, the Company's trade debts have increased due to credit sales allowed to dealers with in the approved limits.
Significant surge in major material prices forced the cost of sales to grow resulting decline in gross profit margin which stood
at 10.9% as compared to 17.3% during corresponding year.
For detail performance review of the Company, refer Chairman's Review and Directors' Report.
3. BASIS OF PREPARATION
These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in
Pakistan. The accounting and reporting standards applicable in Pakistan comprise:
- International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as
notified under the Companies Act, 2017; and
Where provision of and directives issued under the Companies Act, 2017 differ from the IFRS, the provision of and directives
issued under the Companies Act, 2017 have been followed.
These financial statements are presented in Pakistan Rupees which is the functional currency of the Company and figures are
rounded off to the nearest thousand of rupees unless otherwise specified.
3.3.1 Standards, amendments to approved accounting standards effective in the current year
New and amended standards mandatory for the first time for the financial year beginning July 1, 2017:
(a) Amendments to IAS 7, ‘Statement of cash flows’ are applicable for annual periods beginning on or after January 1, 2017. The
amendment requires disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing
activities, including both changes arising from cash flow and non-cash changes.
(c) The Companies Act, 2017 promulgated in the current financial year. The Companies Act, 2017 also revised 4th schedule of the
Companies Ordinance, 1984 and brought changes in the presentation and disclosures of financial statement of the listed
companies. These changes are applicable for the first time to the Company for the financial statements for the year ended
June 30, 2018.
The other new standards, amendments to approved accounting standards and interpretations that are mandatory for the financial
year beginning on July 1, 2017 are considered not to be relevant or to have any significant effect on the Company's financial
reporting and operations.
3.3.2 Standards, amendments to approved accounting standards and interpretations that are not yet effective and have not
been early adopted by the Company
The following new standards and amendments to approved accounting standards are not effective for the financial year beginning
on July 1, 2017 and have not been early adopted by the Company:
(a) IFRS 9, ‘Financial instruments’ is applicable in Pakistan on accounting periods beginning on or after July 1, 2018. IASB has
published the complete version of IFRS 9, ‘Financial instruments’, which replaces the guidance in IAS 39. This final version
includes requirements on the classification and measurement of financial assets and liabilities; it also includes an expected credit
losses model that replaces the incurred loss impairment model currently being used. The standard not likely to have material
impact on the Company’s financial statements.
(b) IFRS 15, ‘Revenue from contracts with customers’ is applicable in Pakistan on accounting periods beginning on or after July
1, 2018. The IASB has issued a new standard for the recognition of revenue. This will replace IAS 18 which covers contracts
for goods and services and IAS 11 which covers construction contracts. The new standard is based on the principle that revenue
is recognised when control of a good or service transfers to a customer – so the notion of control replaces the existing notion
of risks and rewards. The standard permits a modified retrospective approach for the adoption. Under this approach entities
will recognise transitional adjustments in retained earnings on the date of initial application (e.g. July 1, 2018), i.e. without restating
the comparative period. They will only need to apply the new rules to contracts that are not completed as of the date of initial
application. The standard not likely to have material impact on the Company’s financial statements.
(c) Amendment to IAS 12 ‘Income taxes’ as part of annual improvement 2015-2017 cycle is applicable on accounting periods
beginning on or after January 1, 2019. The amendment clarifies that all income tax consequences of dividends (including
payments on financial instruments classified as equity) are recognised consistently with the transactions that generated the
distributable profits – i.e. in profit or loss, other comprehensive income or equity. The amendment is not likely to have material
impact on the Company’s financial statements.
(d) Amendments to IAS 23 'Borrowing Costs' as part of annual improvement 2015-2017 cycle is applicable on accounting periods
beginning on or after January 1, 2019. The amendments clarify that the general borrowings pool used to calculate eligible
borrowing costs excludes only borrowings that specifically finance qualifying assets that are still under development or construction.
Borrowings that were intended to specifically finance qualifying assets that are now ready for their intended use or sale – or any
non qualifying assets – are included in that general pool. This amendment will be applied prospectively to borrowing costs
incurred on or after the date an entity adopts the amendments. The amendments are not likely to have material impact on the
Company’s financial statements.
(e) IFRIC 22 'Foreign Currency Transactions and Advance Consideration' is applicable for annual periods beginning on or after
January 1, 2018. The interpretation clarifies which date should be used for translation when a foreign currency transaction
involves an advance payment or receipt. The related item is translated using the exchange rate on the date that the advance
foreign currency was paid or received and the prepayment or deferred income recognised. The interpretation is not expected
to have a material impact on the Company's financial statements.
(f) IFRIC 23 'Uncertainty over Income Tax Treatment' is applicable for annual periods beginning on or after January 1, 2019. The
interpretation clarifies the accounting for income tax when there is uncertainty over income tax treatment under IAS12. The
interpretation requires the uncertainty over tax treatment be reflected in the measurement of current and deferred tax. The
interpretation is not expected to have a material impact on the Company's financial statements.
There are a number of other standards, amendments and interpretations to the published standards that are not yet effective
and are also not relevant to the Company and, therefore, have not been presented here.
4.1 These financial statements have been prepared under the historical cost convention except for leasehold land which is stated
at the revalued amount, investments which are carried at fair value and certain employee retirement benefits which are measured
at present value of defined benefit obligation less fair value of plan assets.
4.2 The preparation of financial statements in conformity with approved accounting standards requires management to make
judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and in any future periods affected.
The areas where various assumptions and estimates are significant to the Company's financial statements or where judgment
was exercised in application of accounting policies are as follows:
(i) Estimate of useful lives and residual values of property, plant & equipment and intangible assets [note 5.1 and 5.2]
(iii) Estimate of payables and receivables in respect of employees' retirement benefits [note 5.12]
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have
been consistently applied to all the years presented unless otherwise stated.
Owned assets
Operating fixed assets except for leasehold land are stated at cost less accumulated depreciation and impairment loss, if any.
Leasehold land is stated at revalued amount. Capital work-in-progress is stated at cost. All expenditure connected with specific
assets incurred during installation and construction period are carried under capital work-in-progress. These are transferred to
specific assets as and when assets are available for use.
Subsequent costs
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future benefits associated with the item will flow to the Company and the cost of the item can be measured
reliably. Normal repairs and maintenance are charged to expenses as and when incurred.
Depreciation
Depreciation is charged to profit and loss account on the reducing balance basis except for computers and accessories.
Depreciation on computers and accessories is charged to profit and loss account on a straight-line basis. Depreciation is charged
at the rates stated in note 7.1. Depreciation on additions is charged from the month the assets are available for use while no
depreciation is charged in the month in which asset is disposed off.
The depreciation method and useful lives of items of operating fixed assets are reviewed periodically and altered if circumstances
or expectations have changed significantly. Any change is accounted for as a change in accounting estimate by changing
depreciation charge for the current and future periods.
Disposal
Gains or losses on disposal or retirement of operating fixed assets are determined as the difference between the sale proceeds
and the carrying amount of assets and are included in the profit and loss account.
Revaluation is carried out with sufficient regularity to ensure that the carrying amount of assets does not differ materially from
the fair value. Any surplus on revaluation of operating fixed assets is recognised in other comprehensive income and presented
as a separate component of equity as “Surplus on revaluation of operating fixed assets”, except to the extent that it reverses a
revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to profit
or loss to the extent of the decrease previously charged. Any decrease in carrying amount arising on the revaluation of operating
fixed assets is charged to profit or loss to the extent that it exceeds the balance, if any, held in the revaluation surplus on operating
fixed assets relating to a previous revaluation of that asset. The revaluation reserve is not available for distribution to the Company’s
shareholders.
Leased assets
Fixed assets acquired by way of finance lease are stated at an amount equal to the lower of its fair value and the present value
of the minimum lease payments at inception of the lease less accumulated depreciation and impairment losses, if any.
Impairment
The Company assesses at each reporting date whether there is any indication that property, plant and equipment may be
impaired. If such indication exists, the carrying amounts of such assets are reviewed to assess whether they are recorded in
excess of their recoverable amount. Where carrying values exceed the respective recoverable amount, assets are written down
to their recoverable amounts and the resulting impairment loss is taken to profit and loss account except for impairment loss
on revalued assets, which is adjusted against related revaluation surplus to the extent that the impairment loss does not exceed
the surplus on revaluation of that asset.
Intangible assets are stated at cost less accumulated amortisation and impairment loss, if any, and represent the cost of software
licenses and ERP implementation cost.
The costs associated with maintaining computer software programs are recognised as an expense as incurred. Costs that are
directly associated with identifiable and unique software products controlled by the Company and will probably generate economic
benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include staff cost, costs of the
software development team and an appropriate portion of relevant overheads.
Subsequent expenditure
Expenditure which enhances or extends the performance of computer software programmes beyond their original specifications
is recognised as a capital improvement and added to the original cost of the software.
Amortisation
Intangible assets are amortised using the straight-line method over a period of two years.
The assets' useful lives are reviewed, at each reporting date, and adjusted if the impact on amortisation is significant.
5.3.1 Classification
The Company classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables,
held to maturity and available-for-sale. The classification depends on the purpose for which the financial assets were acquired.
Management determines the classification of its financial assets at the time of initial recognition.
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category
if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they
are designated as hedges. Assets in this category are classified as current assets.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period,
in which case, these are classified as non-current assets.
Held to maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturity with
a positive intention and ability to hold to maturity.
Available-for-sale financial assets are non-derivative that are either designated in this category or not classified in any of the
other categories. They are included in non-current assets unless the investment matures or management intends to dispose-off
asset within 12 months of the end of the reporting date.
Regular purchases and sales of financial assets are recognised on the trade-date – the date on which the Company commits
to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not
carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair
value, and transaction costs are expensed in the profit and loss account. Financial assets are derecognised when the rights to
receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially
all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are
subsequently carried at fair value. Loans and receivables and held to maturity investments are subsequently carried at amortised
cost using the effective interest method.
Gains or losses arising from changes in fair value of the 'financial assets at fair value through profit or loss' category are presented
in the profit and loss account within 'Other income / other expenses' in the period in which they arise. Dividend income from
financial assets at fair value through profit or loss is recognised in the profit and loss account as part of 'Other income' when
the Company's right to receive payments is established.
Changes in the fair value of monetary and non-monetary securities classified as available-for-sale are recognised in 'Other
comprehensive income'.
When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in equity
are included in the profit and loss account as 'Gains / losses from investment securities'.
Interest on available-for-sale securities and held to maturity investments is calculated using the effective interest method is
recognised in the profit and loss account as part of 'Other income'. Dividend income from available-for-sale equity instruments is
recognised in the profit and loss account as part of 'Other income' when the Company's right to receive payments is established.
The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group
of financial assets is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured
as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously
recognised in profit or loss - is removed from equity and recognised in profit or loss account. Impairment losses recognised in
profit and loss account on equity instruments are not reversed through the profit and loss account. Impairment testing of other
receivables is described in note 5.8.
Financial liabilities are recognised at the time when the Company becomes a party to the contractual provisions of the instrument.
All financial liabilities are recognised initially at fair value less directly attributable transactions costs, if any, and subsequently
measured at amortised cost using effective interest method.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. Where an existing
financial liability is replaced by another from the same lender on substantially different terms or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as a derecognition of original liability and recognition of
a new liability and the difference in respective carrying amounts is recognised in the profit and loss account.
Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and
settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable
in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
Stores, spares and loose tools are stated at the lower of cost and net realizable value. The cost of inventory is based on weighted
average cost less provision for obsolescence, if any. Items in transit are stated at cost comprising of invoice value plus other
charges thereon accumulated upto the reporting date.
5.7 Stock-in-trade
The cost in relation to raw materials in hand, packing materials and components has been calculated on a weighted average
basis and represents invoice values plus other charges paid thereon.
The cost in relation to work-in-process and finished goods represents direct cost of materials, wages and appropriate manufacturing
overheads.
Raw materials held in custom bonded warehouse and stock-in-transit are valued at cost comprising of invoice value plus other
charges accumulated upto the reporting date.
Net realizable value is the estimated selling price in the ordinary course of business less costs necessary to be incurred in order
to make the sale.
Trade debts are initially recognised at original invoice amount which is the fair value of the consideration to be received in future
and subsequently measured at cost less provision for doubtful debts. Carrying amounts of trade and other receivables are
assessed at each reporting date and a provision is made for doubtful receivables when a collection of the amount is no longer
probable. Debts considered irrecoverable are written off.
Cash and cash equivalents are carried in the statement of financial position at cost. For the purpose of cash flow statement,
cash and cash equivalents comprise of balances with banks and cheques in hand.
Ordinary shares are classified as equity and recognised at their face value.
Interest / mark-up bearing loans and borrowings are recorded at the proceeds received. Finance charges are accounted for on
accrual basis.
A defined contribution plan is a post-employment benefit under which an entity pays fixed contribution into a separate entity
and will have no legal or constructive obligation to pay further amounts. The obligation for contribution to a defined contribution
plan is recognised as an employee service benefit expense in the profit and loss account when it is due.
– voluntary pension schemes managed by Atlas Asset Management Limited, a related party, under the Voluntary Pension
System Rules, 2005, viz, Atlas Pension Fund and Atlas Pension Islamic Fund.
All the newly appointed employees are offered voluntary pension scheme only. However, those employees who are provident
fund trust members, have the option to opt for either of two above mentioned defined contribution plans.
Equal monthly contributions at the rate of 11% of the basic salary are made to the Fund / scheme, both by the Company and
the employees. The Fund is a separate legal entity and its assets are being held separately under the control of its trustees.
Defined benefit plan is a post-employment benefit plan other than the defined contribution plan. The Company's net obligation
in respect of a defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return
for their services in current and prior periods that benefit is discounted to determine its present value.
The Company operates an approved funded gratuity scheme for its management staff and an unfunded gratuity scheme for its
non-management staff. The liability recognised in the statement of financial position in respect of defined benefit plans is the
present value of defined benefit obligation at the end of reporting period less fair value of plan assets. Contributions under the
schemes are made on the basis of actuarial valuation. The valuations of both schemes are carried out annually by an independent
expert, using the "Projected Unit Credit Method" with the latest valuation being carried out as on June 30, 2018.
The amount arising as a result of re-measurements are recognised in the statement of financial position immediately, with a
charge or credit to other comprehensive income in the periods in which they occur. Past service cost, if any, are recognised
immediately in profit and loss account.
Employees' entitlements to annual leaves are recognised when they accrue to employees. A provision is made for the estimated
liability for annual leave as a result of services rendered by employees upto the reporting date.
Liabilities for trade and other payables are carried at their amortised cost, which approximates fair value of the consideration to
be paid in future for goods and services received, whether or not billed to the Company.
5.14 Taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account, except to the
extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
Current
The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date. The
charge for current tax also includes adjustments, where considered necessary, to provision for tax made in the previous years
arising from assessments framed during the year for such years.
Deferred
Deferred tax is recognised using the balance sheet method in respect of temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the reporting date
and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
5.15 Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past event and it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate
of the obligation can be made. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.
5.16 Warranty
The Company recognises the estimated liability to repair or replace products still under warranty at the reporting date. Provision
for warranty is calculated based on past experience / history of the level of repairs and replacements.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the amount of
revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable and is
reduced for allowances such as taxes, duties, incentives, sales returns and trade discounts. Revenue from different sources is
recognised on the following basis:
– revenue from sale of goods is recognised when goods are dispatched and invoiced to customers;
– Interest income on deposits with banks and other financial assets is recognised on accrual basis and;
– dividend income from investments is recognised when the Company's right to receive payment has been established.
Borrowing costs are recognised as an expense in the period in which they are incurred except where such costs are directly
attributable to the acquisition, construction or production of a qualifying asset in which case such costs are capitalised as part
of the cost of that asset.
The foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
transactions. The closing balance of non-monetary items is included at the exchange rate prevailing on the date of the transaction
and monetary items are translated using the exchange rate prevailing on the reporting date. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in profit and loss account with other income / other operating
expenses.
The Company presents earnings per share (EPS) data for its ordinary shares. EPS is calculated by dividing the profit or loss
attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during
the period.
Segment information is presented on the same basis as that used for internal reporting purposes by the Chief Operating Decision
Maker, who is responsible for allocating resources and assessing the performance of the operating segments. On the basis of
its internal reporting structure, the Company considers itself to be a single reportable segment.
Dividend and appropriation to reserves are recognised in the financial statements in the period in which these are approved
During the year, the Company changed its accounting policy for the surplus on revaluation of operating fixed assets, after
enactment of the Companies Act, 2017, which has not carried forward requirement of disclosing the surplus on revaluation of
operating fixed assets as a separate item below equity. Accordingly, in accordance with the requirements of International
Accounting Standard - IAS 16, 'Property, plant and equipment', surplus on revaluation of operating fixed assets would now be
presented within equity. The new accounting policy is explained in note 5.1.
The change in accounting policy has been accounted for retrospectively in accordance with the requirements of IAS 8 'Accounting
policies, changes in accounting estimates and errors' and comparative figures have been restated.
The effect of the change is recognition and presentation of Rs.193,886 thousand for surplus on revaluation of leasehold land
as a capital reserve i.e. separate component of equity and derecognition of surplus on revaluation of leasehold land of Rs.193,886
thousand, previously presented below equity in the statement of financial position. There is no impact of change in accounting
policy on statement on profit or loss and other comprehensive income and statement of cash flows.
As Effect of As As Effect of As
previously restatement restated previously restatement restated
stated stated
---------- Rupees in ‘000 ---------- ---------- Rupees in ‘000 ----------
Impact on statement of
financial position
Surplus on revaluation of
leasehold land (below equity) 193,886 (193,886) - 193,886 (193,886) -
Surplus on revaluation of
leasehold land (within equity) - 193,886 193,886 - 193,886 193,886
Impact on statement of
changes in equity
Surplus on revaluation of
leasehold land - 193,886 193,886 - 193,886 193,886
3,591,257 3,158,027
7.2 Leasehold lands of the Company are located at D-181 and D-63, S.I.T.E. Karachi with an area of 2.68 and 2.34 acres,
respectively.
7.3 Had the leasehold lands been recognised under the cost model, the carrying amount of leasehold land would have been
Rs.322,554 thousand (2017: Rs.322,554 thousand).
Note 2018 2017
------ (Rupees in ‘000) -----
7.4 Depreciation charge has been allocated as follows:
294,500 257,192
7.6 The details of operating fixed assets disposed during the year are as follows:
7.8 Includes Rs.2,797 thousand and Rs.159 thousand advance payment made to Honda Atlas Cars (Pakistan) Limited and Atlas
Honda Limited - related parties, respectively, for purchase of vehicle {2017: Rs.5,906 thousand to Honda Atlas Cars (Pakistan)
Limited}.
ERP
Software implementation
licenses Total
cost
---------- (Rupees in ‘000) ----------
8. INTANGIBLE ASSETS
As at July 1, 2016
Cost 21,117 7,400 28,517
Accumulated amortisation (16,234) (7,400) (23,634)
Net book value 4,883 - 4,883
Year ended June 30, 2017
Opening net book value 4,883 - 4,883
Additions 1,600 - 1,600
Amortisation charge (5,016) - (5,016)
Closing net book value 1,467 - 1,467
At June 30, 2017
Cost 22,717 7,400 30,117
Accumulated amortisation (21,250) (7,400) (28,650)
Net book value 1,467 - 1,467
Year ended June 30, 2018
Opening net book value 1,467 - 1,467
Additions 350 - 350
Amortisation charge (815) - (815)
Closing net book value 1,002 - 1,002
At June 30, 2018
Cost 23,067 7,400 30,467
Accumulated amortisation (22,065) (7,400) (29,465)
Net book value 1,002 - 1,002
Amortisation rate (% per annum) 50 50
8.1 Intangible assets as at June 30, 2018 include items having an aggregate cost of Rs.28,517 thousand (2017: Rs.28,517 thousand)
that have been fully amortised and still in use of the Company.
Distribution cost 29 15 -
Administrative expenses 30 800 5,016
815 5,016
- -
10.1 These represent interest-free loans to executives and other employees as per terms of employment. These loans are provided
for the purchase of motorcycle and other specified reasons. Loans aggregating Rs.2,540 thousand (2017: Rs.2,058 thousand)
are provided for the purchase of motorcycles and are repayable in monthly instalments over a period of forty-eight months for
management staff and fifty-four months for non-management staff. Other loans are recoverable over a period of twelve to
eighteen months. These loans are secured by the registration of motorcycles in the name of the Company and employees vested
retirement benefits.
10.2 The carrying values of these loans are neither past due nor impaired. The credit quality of these financial assets can be assessed
with reference to no default in recent history.
Note 2018 2017
------ (Rupees in ‘000) -----
11. LONG TERM DEPOSITS
Consumables stores
- in hand 113,775 91,775
- in transit 1,739 791
Maintenance spares 102,794 98,635
Loose tools 606 695
218,914 191,896
13. STOCK-IN-TRADE
13.1 Includes raw materials amounting to Rs.6,302 thousand (2017: Nil) held with Atlas Aluminium (Private) Limited - an Associated
Company and Rs.Nil (2017: Rs.267,911 thousand) held with Atlas Metals (Private) Limited - an Associated Company for further
processing into parts to be supplied to the Company.
13.2 Stock-in-trade and trade debts upto a maximum amount of Rs.4,201,487 thousand (2017: Rs.4,201,487 thousand) are under
hypothecation of commercial banks as security for short term borrowings (note 25).
Consider good
Associated Companies:
Atlas Honda Limited 88,048 57,994
Honda Atlas Cars (Pakistan) Limited 14,483 10,830
Atlas Metals (Private) Limited - 202,371
Others 1,651,780 93,447
1,754,311 364,642
Consider doubtful
Others 9,948 7,619
1,764,259 372,261
Provision for doubtful debts 14.1 (9,948) (7,619)
1,754,311 364,642
14.3 Trade debts which are past due beyond one year have been impaired and fully provided for.
14.4 The maximum aggregate amount of trade receivable from related parties at the end of any month during the year was
Rs.277,062 thousand (2017: Rs.271,196 thousand).
Secured
Unsecured
15.1 These represent interest-free welfare loans and salary advance provided to employees in accordance with the Company's
policy and have maturities upto ten months.
15.2 Includes advances to suppliers, contractors and others amounting Rs.164 thousand (2017: Nil) paid to Atlas Honda Limited -
an Associated Company against purchase of motorcycle for employees.
2018 2017
----- (Number of units) ----- Related parties
17.1 1,116,891 units of HBL Islamic Money Market Fund valuing Rs.117,214 thousand (2017: 893,378 units of HBL Islamic Money
Market Fund valuing Rs.89,899 thousand) are under lien of a commercial bank against guarantees aggregating Rs.93,764
thousand (2017: Rs.76,764 thousand) issued in favour of Sui Southern Gas Co. Ltd., Pakistan State Oil Co. Ltd. and Excise &
Taxation Department, Government of Sindh on behalf of the Company.
19.1 Represents banking instruments received by the Company from dealers at regional offices in respect of sales but not
deposited in the Company's bank account till reporting date.
13,474,962 13,474,962
An independent revaluation of the Company's leasehold land at D-181, Central Avenue, S.I.T.E., Karachi was performed by
M/s. Surval on June 30, 2008 and that revaluation exercise resulted in appraisal a surplus of Rs.173,786 thousand over the
book value of Rs.414 thousand. This leasehold land has been again revalued on July 16, 2014 by MYK Associates (Private)
Limited, an Independent Valuer, based on present market value for similar plots in the vicinity (level 2 of fair value hierarchy). The
different levels of fair value have been defined in IFRS 13 and are mentioned in note 38.2.
The latest revaluation exercise resulted in surplus of Rs.20,100 thousand over the book value of Rs.174,200 thousand. At the
time of latest revaluation, forced sale value of the this land was Rs.155,440 thousand.
72,813 79,868
22.1 Provision for gratuity
22.1.1 As stated in note 5.12.2, the Company operates an approved funded gratuity scheme for its management staff and an unfunded
gratuity scheme for its non-management staff.
22.1.2 Plan assets held in trust are governed by local regulations which mainly includes Trust Act, 1882, the Companies Act, 2017,
Income Tax Rules, 2002 and Rules under the Trust deed of the Plan. Responsibility for governance of the Plan, including
investment decisions and contributions schedules lies with the Board of Trustees. The Company appoints the trustees.
22.1.3 The latest actuarial valuations of the Schemes as at June 30, 2018 were carried out by an independent expert, using the
'Projected Unit Credit Method'. Details of the Schemes as per the actuarial valuations are as follows:
Liability at end of the year 14,767 6,477 1,453 1,566 16,220 8,043
Balance at beginning of the year 113,594 97,885 1,566 1,568 115,160 99,453
Benefits paid (7,081) (1,235) (322) (280) (7,403) (1,515)
Current service cost 6,128 5,244 49 49 6,177 5,293
Interest cost 8,737 7,157 111 106 8,848 7,263
Re-measurements on obligation 2,742 5,030 49 123 2,791 5,153
Receivable recognised in respect of transfers (182) (487) - - (182) (487)
Balance at end of the year 123,938 113,594 1,453 1,566 125,391 115,160
Balance at beginning of the year 6,477 13,360 1,566 1,568 8,043 14,928
Charge for the year 6,708 6,227 160 155 6,868 6,382
Contributions made during the year (6,478) (13,361) (322) (280) (6,800) (13,641)
Re-measurements recognised in
other comprehensive income 8,060 251 49 123 8,109 374
The sensitivity analysis is based on a change in an assumption while holding all other assumptions constants. In practice, this
is unlikely to occur, and change in some of the assumptions may be correlated. When calculating the sensitivity of the defined
benefit obligation to significant actuarial assumptions the same method (present value of defined benefit obligation calculated
with the projected unit credit method at the end of reporting period) has been applied as when calculating the gratuity liability
recognised within the statement of financial position.
The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.
22.1.13 The expected return on plan assets was determined by considering the expected returns available on the assets underlying
the current investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the
reporting date.
22.1.14 Based on actuary's advice, the expected contribution and expense for the year ending June 30, 2019 to management and
non-management gratuity plans will be Rs.8,115 thousand and Rs.181 thousand respectively.
22.1.15 The weighted average duration of management and non management gratuity is 5.61 years and 5.81 years respectively.
Expected maturity analysis of undiscounted retirement benefit plans:
Less than Between Between Over Total
a year 1-2 years 2-5 years 5-20 years
-------------------------- (Rupees in ’000) --------------------------
As at June 30, 2018
Management staff 9,593 49,710 23,807 248,962 332,072
Non-management staff 47 479 114 2,846 3,486
Total 9,640 50,189 23,921 251,808 335,558
22.2.1 Includes liability in respect of key management personnel aggregating to Rs.25,550 thousand (2017: Rs.22,005 thousand).
24.1 Trade creditors and accrued liabilities include Rs.784,755 thousand (2017: Rs.219,096 thousand) pertaining to related parties.
The Company, during the year ended June 30, 2014, also filed an appeal in the Court and became a party to subject controversy
raised through various appeals. The Court, through its interim order, dated April 3, 2014 has granted the above-mentioned
interim relief to the Company and directed to take up the petition along with identical petitions on the next date of hearing. As
at June 30, 2018, the Company has provided bank guarantees amounting Rs.72,000 thousand (2017: Rs.55,000 thousand)
in favour of The Director Excise and Taxation, Government of Sindh for releasing the consignments imported from time to time
and for the purpose of carriage of such goods by road within the province of Sindh. The management believes that the chances
of success in the petition are in the Company's favour.
24.6 Other liabilities include vehicle deposits under Company's vehicle policy aggregating Rs.5,448 thousand (2017: Rs.5,411 thousand).
25.1 Running finance / musharakah facilities available from various banks under mark-up arrangements aggregate to Rs.3,100,000
thousand (2017: Rs.3,150,000 thousand). During the year these finance facilities carry mark-up at the rates ranging from 6.22%
to 7.45% (2017: 6.14% to 7.22%) per annum.
25.2 Demand finance facilities aggregating Rs.3,100,000 thousand (2017: Rs.3,000,000 thousand) are also available to the Company
from various banks as sub-limits of the above mentioned running finance / musharakah facilities. These facilities carries mark-up
at the rates ranging from 6.14% to 7.12% (2017: 6.15% to 6.46%) per annum.
25.3 FE-25 facilities aggregating Rs.2,440,000 thousand (2017: Rs.2,690,000 thousand) are available from various banks as sub-limits
of above mentioned running finance / musharakah facilities. The Company has not utilised these facility during the year.
25.4 The above-mentioned finance facilities are secured against joint pari passu hypothecation charge on stock-in-trade and trade
debts and are expiring on various dates upto December 31, 2018.
25.5 The facilities for opening letters of credit and guarantees as at June 30, 2018 aggregated to Rs.1,930,000 thousand (2017:
2,680,000 thousand) of which the amount remained unutilised at year end aggregated to Rs.1,759,923 thousand (2017:
2,324,220 thousand). These facilities are secured by joint pari passu hypothecation charge on stock-in-trade and trade debts
and lien on import documents.
26.1.1 The Company received notice from the Directorate of Intelligence and Investigation, FBR, Lahore in which it had been alleged
that the Company purchased goods from certain suppliers who were registered with Regional Tax Offices, but were fake and
issued sales tax invoices to the Company on the basis of which the Company claimed input tax adjustment amounting to
Rs.29.066 million which according to them was illegal / inadmissible. The name of the Company along with 135 companies
and other individuals had therefore been included as an accused person in the First Information Report (FIR) No.04/2011 dated
March 26, 2011 registered by the Additional Director, Intelligence and Investigation, FBR, Lahore. The Company has, therefore,
filed a Constitutional Petition in the Honourable Lahore High Court (the Court) and prayed to quash the FIR against the Company
and declare the notice illegal. The Court has granted stay order and advised the concerned authorities to restrain from further
proceeding with the matter. Further, the Court has quashed the criminal proceedings initiated against the Company as being
unconstitutional, violative of fundamental rights and ultra vires the Sales Tax Act, 1990 (the Act). The FBR against the orders of
the Court has filed an appeal in Honourable Supreme Court of Pakistan, which is pending for hearing.
26.1.2 The Deputy Commissioner Inland Revenue (DCIR), Large Taxpayers Unit, Karachi conducted sales tax audit for the tax year
2013 and passed an order dated January 28, 2015 with respect to (i) input claims against purchases from certain suppliers
whose status were subsequently found as blacklisted / suspended on FBR web portal, (ii) non-payment of federal excise duty
on royalty, (iii) non-deduction of sales tax as withholding agent on advertisement expense and (iv) tax credits not allowed on
certain expenses. DCIR, through abovementioned order raised an aggregate demand of Rs.11.819 million including default
surcharge. The Company filed appeal on February 19, 2015 before Commissioner Inland Revenue Appeals CIR(A) against the
above order under section 45B of the Act and section 33 of Federal Excise Act, 2005. Pursuant to the appeal, the CIR(A),
through his order dated April 28, 2015, granted relief to the Company in respect of the demand raised in (i), (iii) and (iv) points
mentioned above. However, demand of federal excise duty on royalty payment was considered correct by CIR(A) in his order.
Accordingly, the Company has filed an appeal before Appellate Tribunal Inland Revenue (ATIR) on May 23, 2015 against the
order of levy of excise duty on royalty. Further, the Commissioner Inland Revenue has also filed an appeal on June 25, 2015
before ATIR against the abovementioned order of CIR(A) through which relief was granted to the Company. The above appeals
are pending for hearing.
26.1.4 The Company received a show cause notice dated June 27, 2016 from Assistant Commissioner Enforcement-II, Punjab Revenue
Authority (PRA), Government of Punjab for proceeding against the Company for alleged violation of various sections of Punjab
Sales Tax on Services Act, 2012 (the Act) read with Punjab Sales Tax on Services (Specific Provisions) Rules, 2012 (the Rules)
and demanded tax on account of Punjab sales tax on franchises services aggregating Rs.55.443 million. Further, penalties
aggregating Rs.2.962 million has also been charged.
The Company against the abovementioned show cause notice filed a petition on July 15, 2016 before the High Court of Sindh
(the Court) on the basis that PRA has no jurisdiction to issue such notice. The Company is engaged in manufacturing of automotive
batteries and owing to its technical assistance agreement with technology supplier it pays technical fees to them and in respect
of such technical services the Company is making regular payments of Sindh Sales Tax to the Sindh Revenue Board. Further,
the Company's factory premises as well as all production and entire operations are in province of Sindh, therefore PRA has no
jurisdiction to demand any sales tax on franchise fees on the basis of purported apportionment of the same. The Court, through
its interim order dated July 15, 2016 issued notices to concerned persons / representatives and suspended the operations of
abovementioned show cause notice.
26.1.5 The Deputy Commissioner Inland Revenue (DCIR), Large Taxpayers Unit, Karachi, for the tax year 2015 passed an order dated
January 22, 2016 under section 161 / 205 of the Income Tax Ordinance, 2001 (the Ordinance) on account of non-deduction
of withholding tax on various expenses and created a demand of Rs.56.449 million, including default surcharge and penalty.
The Company filed a rectification application on February 11, 2016 against the aforesaid order pursuant to which the DCIR
passed a rectified order dated February 22, 2016 under section 221 / 161 / 205 of the Ordinance. As a result of the rectified
order, the total demand of Rs.56.449 million identified in the original order was reduced to Rs.0.398 million inclusive of default
surcharge and penalty.
While passing the rectified order, the DCIR created an additional demand of Rs.81.593 million including default surcharge and
penalty on account of non-deduction of tax on discounts allowed to dealers. The Company filed an appeal before the Commissioner
Inland Revenue (Appeals) [CIR(A)] on March 10, 2016 against the rectified order and challenged the aggregate demand of
Rs.81.991 million. Pursuant to this appeal, CIR(A) passed an order dated June 8, 2016 under section 129 of the Ordinance and
granted relief to the Company on aggregate demand of Rs.81.991 million. The Commissioner Inland Revenue (CIR) filed an
appeal on August 5, 2016 against the above mentioned order of CIR(A) before the Appellate Tribunal Inland Revenue; which is
pending for hearing.
26.1.6 The Additional Commissioner Enforcement-III (Assessing Officer), Punjab Revenue Authority (PRA), Government of Punjab issued
a show cause notice to the Company and alleged that the Company has failed to withhold and deposit the Punjab Sales Tax
on advertisement services. The Company responded that some of the service providers do not have their registered office in
the territorial jurisdiction of Punjab and in most of the cases, services were not completely consumed in Punjab only rather were
electronically transmitted throughout Pakistan. Further, the Company had withheld sales tax from all the payments made against
said services and has deposited either to Federal Board of Revenue (FBR) or Sindh Revenue Board (SRB), therefore, demand
raised by PRA would tantamount to double jeopardy for the Company. However, the Assessing Officer did not consider the
arguments of the Company and passed an order dated May 22, 2017 under section 14 & 19 of Punjab Sales Tax on Services
Act 2012 read with Punjab Sales Tax on Services (Withholding) Rules 2012 & 2015 and created an impugned demand of
Rs.4.327 million including penalty.
The Company filed an appeal before Commissioner (Appeal), PRA, Lahore on June 23, 2017 against the aforementioned demand
who also upheld the order of the Assessing Officer on October 3, 2017. The Company then filed an appeal before Appellate
Tribunal, PRA, Lahore on November 23, 2017. The Appellate Tribunal has granted a stay against demand on November 29,
2017. The main appeal is pending before the Appellate Tribunal.
26.1.7 Additional Commissioner Inland Revenue (ACIR), Large Taxpayers Unit, Karachi, for the tax year 2016 passed an order dated
November 30, 2017 under section 161 / 205 of the Income Tax Ordinance, 2001 on account of non-deduction of tax on (i) trade
discount allowed to dealers, (ii) rent paid to Atlas Foundation, (iii) cartage & octroi expenses, (iv) repair and maintenance expenses
and (v) entertainment expenses. ACIR through the order created an aggregate demand of Rs.200.172 million including default
surcharge and penalty. The Company filed an appeal before [CIR(A)] on December 20, 2017 against (i) and (ii), where as tax
levied for (iii), (iv) and (v) were not contested in appeal. The Company paid the demand of Rs.1.5 million in light of directions
given by [CIR(A)] on December 22, 2017 while granting stay from recovery proceedings which duly covers the balance tax
demand Rs.1.221 million in respect of issues not contested in appeals. Pursuant to the appeal, [CIR(A)], on January 22, 2018,
passed an order under section 129 of the Ordinance and granted relief in respect of both issues contested i.e. (i) trade discount
allowed to dealers and (ii) rent paid to Atlas Foundation. The department has filed an appeal on April 23, 2018 against the
abovementioned order of CIR(A) before the Appellate Tribunal Inland Revenue; which is pending for hearing.
Guarantees aggregating Rs.93,764 thousand (2017: Rs.76,764 thousand) are issued by a commercial bank on behalf of the
Company to Sui Southern Gas Co. Ltd., Pakistan State Oil Co. Ltd. and Excise and Taxation Department, Government of Sindh.
2018 2017
------ (Rupees in ‘000) ------
26.2 Commitments
26.2.1 Commitments in respect of letters of credit / contract relating to:
- raw materials, stores, spares and loose tools 270,386 197,888
- capital expenditure 66,020 81,128
336,406 279,016
26.2.2 Commitments outstanding for capital expenditure other than through letters of credit as at June 30, 2018 aggregated to
Rs.97,761 thousand (2017: Rs.168,831 thousand).
2018 2017
------ (Rupees in ‘000) ------
27. SALES - Net
Local sales
- manufacturing activity 23,149,141 21,239,360
- trading activity 1,218,867 1,370,387
24,368,008 22,609,747
4,432 44,467
24,372,440 22,654,214
Less:
- sales tax 3,664,296 3,404,564
- discounts 2,375,283 2,079,742
6,039,579 5,484,306
18,332,861 17,169,908
28. COST OF SALES
28.3 Salaries, wages and benefits include Rs.3,018 thousand (2017: Rs.2,747 thousand) and Rs.9,903 thousand (2017: Rs.8,265
thousand) in respect of staff retirement benefits gratuity and provident / pension funds respectively.
28.4 Royalty charged in these financial statement pertains to GS Yuasa International Limited having registered office at
1, Inobanba-cho, Nishinosho, Kisshoin, Minami-ku, Kyoto 601-8520 Japan.
29.1 Salaries and benefits include Rs.1,050 thousand (2017: Rs.969 thousand) and Rs.3,050 thousand (2017: Rs.2,514 thousand)
in respect of staff retirement benefits gratuity and provident / pension funds respectively.
30.1 Salaries and benefits include Rs.2,800 thousand (2017: Rs.2,665 thousand) and Rs.5,447 thousand (2017: Rs.6,526 thousand)
in respect of staff retirement benefits gratuity and provident / pension funds respectively.
30.2 Donation of Rs.20,652 thousand (2017: Rs.18,682 thousand) charged in these financial statements is paid to Atlas Foundation,
2nd Floor, Federation House, Shara-e-Firdousi, Clifton, Karachi (the Foundation). Mr. Yusuf H. Shirazi, Chairman of the Company
and Frahim Ali Khan, Director of the Company are Directors of the Foundation.
73,988 249,161
32. OTHER EXPENSES
160,045 168,613
32.1 Auditors' remuneration
1,770 1,755
32.2 Represents exchange loss arising on revaluation of actual currency.
Mark-up on:
- running finances / musharakah 80,350 35,852
- demand finances 30,637 25,177
110,987 61,029
Interest on workers' profit participation fund 24.3 - 21
Bank and other financial charges 6,858 7,120
117,845 68,170
34. TAXATION
Current tax
Current tax on profits for the year 238,688 564,219
Adjustments for current tax of prior years 4,366 (13,812)
243,054 550,407
Deferred tax
Origination and reversal of temporary differences 6,510 44,068
Impact of change in tax rate (8,062) (5,904)
(1,552) 38,164
241,502 588,571
34.2 The provision for current year tax represent tax on taxable income at the rate of 30%. It also include provision for supertax at
3% as required under section 4B of the Income Tax Ordinance, 2001. According to management, the tax provision made in the
financial statements is sufficient. A comparison of last three years of income tax provisions with tax assessed is presented below:
Income tax provision for the year - accounts 564,219 584,183 419,363
Income tax as per tax assessment 483,869 514,756 417,783
Excess 80,350 69,427 1,580
34.2.1 Excess is mainly due to super tax provision recorded in respective years which have not become due as the Company has filed
petition in the High Court of Sindh against levy of super tax.
34.3 Section 5A of the Income Tax Ordinance, 2001 imposes tax at the rate of 7.5% on every public company other than a scheduled
bank or modaraba, that derives profits for tax a year but does not distribute 40% of accounting profit either through cash dividend
or issuance of bonus shares within six months of the end of said tax year.
The Board of Directors in their meeting held on August 28, 2018 has proposed to distribute sufficient dividend for the year ended
June 30, 2018 (refer note 45) which complies with the above-stated requirements. Accordingly, no provision for tax on undistributed
reserves has been recognised in these financial statements for the year ended June 30, 2018.
2018 2017
------ (Rupees in ‘000) ------
35. EARNINGS PER SHARE
No figures for diluted earnings per share has been presented as the Company has not issued any instruments carrying options which
would have an impact on earnings per share when exercised.
Related parties comprise of the Holding Company, Associated Companies, directors of the Company, companies in which
directors are interested, key management personnel, post employment benefit plans and close members of the families of the
directors and key management personnel. The Company in the normal course of business carries out transactions with various
related parties. Detail of related parties (with whom the Company has transacted) along with relationship and transactions with
related parties, other than those which have been disclosed elsewhere in these financial statements, are as follows:
Atlas Foundation
36.1.1 GS Yuasa International Limited (GSYIL) is a company incorporated in Japan, having registered office at 1, Inobanba-cho,
Nishinosho, Kisshoin, Minami-ku, Kyoto 601-8520, Japan. GSYIL holds 15% shares in the Company. Mr. Osamu Murao is the
President of GSYIL. Major line of business of GSYIL is manufacturing and sale of automotive batteries, industrial batteries, power
supply systems, switch gear, lighting equipment, ultraviolet systems, specialty equipment, and other electrical equipment.
Auditors have expressed unqualified opinion on the financial statements of GSYIL for the year ended March 31, 2017.
36.1.2 Atlas Global FZE (AG) is a Free Zone establishment with limited liability in the Jebel Ali Free Zone, Dubai, UAE formed under the
Law 9 of 1992 and implementing regulation issued there under by Jebel Ali Free Zone. The registered office of AG is P.O. Box
17442, Dubai, UAE. Mr. Iftikhar H. Shirazi is the Chief Executive Officer of AG. Major line of business of AG is general trading
activities. Auditors have expressed unqualified opinion on the financial statements of AG for the year ended June 30, 2017.
36.1.3 Atlas Worldwide General Trading (L.L.C) (AWWT) established with limited liability in Dubai formed under Federal Law 2 of 2015
by Dubai, UAE. The registered office of AWWT is Office 311, Nasir Ahmed Nasir Lootah Building, Khalid Bin Al Waleed Road,
Dubai, UAE. Mr. Iftikhar H. Shirazi is the Chief Executive Officer of AWWT. Major line of business of AWWT is general trading
activities. Auditors have expressed unqualified opinion on the financial statements of AWWT for the year ended June 30, 2017.
The related party status of outstanding balances as at June 30, 2018 is included in 'Capital work-in-progress - note 7.7',
'Stock-in-trade - note 13.1', 'Trade debts - note 14', 'Loans and advances - 15.2', 'Investments note - 17' and 'Trade and other
payables - note 24.1' respectively. These are settled in ordinary course of business.
Number of persons 1 1 - 2 26 23
Aggregate amount charged in these financial statements for meeting fee to two (2017: two) non-executive directors was Rs.600
thousand (2017: Rs.500 thousand).
The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including foreign
exchange risk, interest rate risk and price risk). The Company overall risk management program focuses on having cost effective
funding as well as to manage financial risk to minimize earnings volatility and provide maximum return to shareholders.
The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management
framework. The Board is also responsible for developing and monitoring the Company's risk management policies.
Credit risk represents the risk of accounting loss being caused if counterparty fails to perform as contracted or discharge an
obligation. Credit risk arises from loans, trade deposits, trade debts, loans & advances, investments, other receivables and
deposits with banks & financial institutions.
The carrying amounts of financial assets represent the maximum credit exposure. The financial assets exposed to credit risk
aggregated to Rs.3,028,167 thousand (2017: Rs.2,870,620 thousand) as at June 30, 2018 and are as follows:
2018 2017
------ (Rupees in ‘000) ------
Out of the total financial assets credit risk is concentrated in investments in mutual fund securities, trade debts and deposits
with banks as they constitute 99% (2017: 99%) of the total financial assets.
To manage exposure to credit risk in respect of trade debts, management performs credit reviews taking into account the
customer's financial position, past experience and other relevant factors. Where considered necessary, advance payments are
obtained from certain parties.
All the trade debts at the reporting date represent domestic parties.
The maximum exposure to credit risk for trade debts at the reporting date by type of customer are as follows:
2018 2017
Rupees Rupees
% in ‘000 % in ‘000
The credit quality of loans, advances, deposits and other receivables can be assessed with reference to their historical performance
with no or negligible defaults in recent history and no losses incurred.
2018 2017
Mutual funds Agency Rating ---(Rupees in ‘000)---
Liquidity risk is the risk that an entity will encounter difficulty, in meeting obligation associated with financial liabilities.
The Company manages liquidity risk by maintaining sufficient cash and the availability of funding through an adequate amount
of committed credit facilities. At June 30, 2018, the Company had Rs.3,100,000 thousand available borrowings limits from
banks / financial institutions and of bank balances Rs.26,514 thousand.
The table below analyses the Company's financial liabilities into relevant maturity groupings based on the remaining period at
the reporting date to contractual maturity dates. The amounts disclosed in the table are the contractual undiscounted cash
flows:
Carrying Contractual Maturity upto Maturity more
Amount cash flows one year than one year
------------------------------(Rupees in '000)------------------------------
June 30, 2018
The contractual cash flows relating to the above financial liabilities have been determined on the basis of mark-up rates effective
as at June 30, 2018.
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect
the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters while optimising the return.
Foreign exchange risk is the risk that the fair value of future cash flows of a financial instrument shall fluctuate because of changes
in foreign exchange rates.
The Company is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the United
States Dollar (U.S. Dollar). Currently, the Company's foreign exchange risk is restricted to the amounts payable to foreign entities.
The Company's exposure is as follows:
2018 2017
Rupees U.S. Rupees U.S.
in '000 Dollars in '000 Dollars
Balance sheet exposure
Exchange rate of 121.60 (2017: 105.00) for US Dollar to Rupee has been applied.
At June 30, 2018, if the Rupee had weakened / strengthened by 5% against U.S. Dollars with all other variables held constant,
the recalculated post-tax profit for the year would have been Rs.486 thousand (2017: Rs.420 thousand) higher / (lower), mainly
as a result of foreign exchange gain / (loss) on translation of U.S. Dollar denominated financial liabilities.
Interest rate risk represents the risk that the fair value or future cash flow of a financial instrument will fluctuate because of change
in market interest rates.
The Company's interest rate exposure arises from short term borrowings. Borrowings issued at variable rates expose the
Company to cash flow risk and borrowing issued at fixed rate expose the Company to fair value interest rate risk. At June 30,
2018, the Company's interest bearing borrowings aggregated to Rs.2,459,687 thousand (2017: Rs.822,770 thousand).
At June 30, 2018, if the interest rates on the Company's borrowings had been 1% higher / (lower) with all other variables held
constant, the calculated post-tax profit for the year would have been Rs.24,597 thousand (2017: Rs.8,828 thousand) lower /
higher mainly as a result of higher / (lower) interest expense on floating rate borrowings.
Price risk
Price risk represents the risk that the fair values or future cash flows of financial instruments will fluctuate because of changes
in market prices (other than those arising from foreign exchange risk or interest rate risk), whether those changes are caused
by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in
the market.
The Company is exposed to equity securities price risk because of investments in mutual fund securities amounting to Rs.861,921
thousand (2017: Rs.2,464,851 thousand) and classified at fair value through profit or loss. The Company is not exposed to
commodity risk.
At June 30, 2018, if fair value (Net Asset Value) had been 1% higher / lower with all other variables held constant, the post-tax
profit for the year would have Rs.8,619 thousand (2017: Rs.24,649 thousand) higher / (lower) as a result of gain / (loss) on
investments classified as at fair value through profit or loss.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Underlying the definition of fair value is the presumption that the Company is going
concern and there is no intention or requirement to curtail materially the scale of its operation or to undertake a transaction on
adverse terms.
The carrying values of all financial assets and liabilities reflected in the financial statements are a reasonable approximation of
their fair values.
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined
as follows:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities [Level 1].
- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) [Level 2].
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) [Level 3].
There were no transfers amongst the levels during the current and preceding year. The Company’s policy is to recognise transfer
into and transfers out of fair value hierarchy levels as at the end of the reporting periods.
Level 1: The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date.
A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry
group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on
an arm’s length basis. These instruments are included in Level 1.
Level 2: The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques.
These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on
entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included
in Level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
Financial liabilities at
amortised cost
2018 2017
----- Rupees in ‘000 -----
Financial liabilities as per
statement of financial position
Trade and other payables 1,510,995 1,011,665
Accrued mark-up 20,259 4,623
Short term borrowings 2,459,687 882,770
Unclaimed dividend 34,722 25,798
4,025,663 1,924,856
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in
order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital.
The Company manages its capital structure by monitoring return on net assets and makes adjustments to it in the light of
changes in economic conditions. In order to maintain or adjust the capital structure, the Company may adjust the amount of
dividends paid to shareholders and / or issue new shares. There was no change to the Company’s approach to capital management
during the year.
The production capacity of the plant cannot be determined as this depends upon the relative proportion of various types of
automotive and motorcycle batteries produced.
These financial statements have been prepared on the basis of the single reportable segment.
Sales of battery and allied products represent 94.32% (2017: 93.18%) of the total revenue of the Company.
All non-current assets of the Company as at June 30, 2018 are located in Pakistan.
All of the Company's sales relate to customers in Pakistan other than export sales amounting to Rs.4,432 thousand (2017:
Rs.44,467 thousand) made to Afghanistan.
The Company's customer base is diverse with no single customer accounting for more than 10% of net revenue.
42.1 The following information is based on unaudited financial statements of the Fund for the year ended June 30, 2018:
2018 2017
------ (Rupees in ‘000) ------
42.3 The investments out of provident fund have been made in accordance with the provisions of section 218 of the Companies Act,
2017 and conditions specified thereunder.
The corresponding figures have been rearranged and reclassified, wherever considered necessary, to comply with the requirements
of the Companies Act, 2017 and for the purposes of comparison and better presentation. Following major reclassification have
been made:
2017
Reclassified from component Reclassified to component Rupees in ‘000
Trade and other payable Unclaimed dividend 25,798
(Disclosed on the face of statement
of financial position)
The Board of Directors, in their meeting held on August 28, 2018, (i) approved the transfer of Rs. 340,000 thousand (2017:
Rs.870,000 thousand) from unappropriated profit to general reserve and (ii) proposed a final cash dividend of Rs. 10 (2017:
Rs.35.00) per share amounting to Rs. 173,998 thousand (2017: Rs.608,993 thousand) and (iii) proposed bonus shares at the
rate of 40% in proportion of two ordinary shares for every five shares held amounting to Rs. 69,599 for approval of the members
at the Annual General Meeting to be held on September 27, 2018.
These financial statements do not reflect the proposed appropriations, which will be accounted for in the statement of changes
in equity as appropriations from unappropriated profit in the year ending June 30, 2019.
These financial statements were authorised for issue on August 28, 2018 by the Board of Directors of the Company.
CFO Chief Financial Officer NCCPL National Clearing Company Pakistan Limited
CIR (A) Commissioner Inland Revenue (Appeals I) OEM Original Equipment Manufacturer
EBITDA Earnings Before Interest, Tax, Depreciation PSX Pakistan Stock Exchange
& Amortization
PUC Projected Unit Cost
ERP Enterprise Resource Planning
QCC Quality Control Circle
FBR Federal Board of Revenue
UK United Kingdom
GDP Gross Domestic Product
UPS Uninterruptible Power Supply
GIKEST Ghulam Ishaq Khan Institute of Engineering
USA United States of America
Sciences and Technology
WPPF Workers’ Profit Paticipant Fund
HR Human Resource
WWF Workers’ Welfare Fund
IBA Institute of Business Administration
IT Information Technology
AtlasAutos 2011
AtlasAluminium 2016
Light Batteries
CGR30 7 PL CGR30 CNG Rickshaw
GR46 9 PL NS40SR Suzuki Van / Pick-up, Subaru Van / Pick-up (old models) (600cc to 800cc)
GL48 9 PL NS40ZL 9PL Suzuki Mehran, Daihatsu Cuore, Kia Classic, All CNG converted vehicles (800cc to 1000cc)
GL50 11 PL NS40ZL 11PL All types of vehicles (800cc to 1300cc)
CNG60 13 PL N40
GR65 13 PL NS60
Datsun 120Y, Mazda, Mitsubishi Lancer, Toyota, Honda Civic (1000cc to 1800cc)
GL65 13 PL NS60L
GR70 9 PL N50
80D26R 11 PL N50Z
Honda Accord, Honda CRV, Toyota Mark II, Toyota Crown, Toyota Cressida, Mercedes Benz,
GR85 13 PL N70 EXTRA
Willys Jeeps, MF375 Tractors, Hyundai, Daewoo (2000cc to 6000cc)
GL85 13 PL N70 EXTRA L
Medium Batteries
GR87 11 PL NS70
GR95 13 PL N70Z
Toyota Hi-Ace, Mercedes Benz, Isuzu Bus JCR 520zz, Massey Ferguson Tractors, MF-210 Cruiser,
GR100 15 PL N85P Toyota Hi-Lux, Nissan Diesel Pick-up, Ford 1910 Tractor (2000cc to 6000cc)
GL100 15 PL N85L
6FT120 15 PL 6FT15
Fiat Tractors 460 / 480, IMT 540 Tractors, Massey Ferguson Tractors 240 / 265, Ford Wagons,
N125 17 PL N100S
Land Rover, Toyota Land Cruiser (3000cc to 6000cc)
GX132 17 PL Isuzu Trucks, Mercedes Benz, Hino Truck ZH - 100, Fiat Tractors 640, Isuzu JCR 460R
GX135 19 PL N100 (3000cc to 6000cc)
Heavy Batteries
GX155 21 PL N120S Fiat Tractors 640, Hino Trucks and Busses, Hino Bowzer, Fiat Trucks, Ford Dumper, Isuzu Diesel
GX165 21 PL N120S Buses, Fiat Buses (3000cc to 12000cc)
GX175 23 PL N140
4DLT145 23 PL N130S Ford Tractor 3610 and 46
4DLT160 27 PL N150S
GL190 23 PL
195G51F 25 PL N150
Bedford Truck, Fiat Tractors 640, Mazda Coaster T-3000, Isuzu TD-72, Generator Sets,
GX200R 27 PL N175
Road Rollers and Belarus Tractors
GX200FH 27 PL N175
GX200F 27 PL N190Z
210H52 31 PL N200P
Generator Sets, Road Roller, Bulldozer
245H52 33 PL N200
Atlas Hybrid - Automotive
HB46 9 PL NS40ZL All types of vehicles (800cc to 1300cc)
HB50 11 PL NS40ZL All types of vehicles (800cc to 1300cc)
HB65 13 PL NS60L All types of vehicles (1000cc to 1800cc)
HB65 (Thin Pole) 13 PL NS60L All types of vehicles (1000cc to 1800cc)
HB100 15 PL GR100 All types of vehicles (2000cc to 6000cc)
Motorcycle Battery
GM2.53C2 CLASSIC 3 PL Honda CD70, CG125, all Japanese and Chinese motorcycles
Distilled Water
Battery Tonic 1000 ML Distilled water for all types of batteries
AS AUTO INDUSTRY
SUPREME MOTORS
It is to inform you that the Board has approved the remuneration for the following, for the year ending
June 30, 2019.
Bonus, retirement benefits and other facilities are provided in accordance with Company's rules.
Yours truly
For Atlas Battery Limited
Muhammad Iqbal
Company Secretary
Copy of Computerized National Identification Number - CNIC or National Tax Number – NTN
The shareholders are informed that as per sub Clause 9(i) of Regulation 4 of Companies (Distribution of Dividends)
Regulations 2017, the identification of the registered shareholder or its authorized person should be made
available with the Company. Therefore it is requested that shareholders must provide copy of their Computerized
National Identity Card (in case of individual) or National Tax Number (in case of other than individual) or Passport
(in case of foreign individual) shareholder.
The shareholders are therefore requested to provide the above documents by mail to the Company Secretary
at following address, unless it has already been provided. The members while sending above documents must
quote their respective folio number.
Shareholders are also requested to immediately notify the change of address, if any.
Yours truly
For Atlas Battery Limited
Muhammad Iqbal
Company Secretary
As per Section 242 of Companies Act, 2017, it is mandatory for the public listed companies to pay cash dividend
to its shareholders ONLY through electronic mode, directly into bank account designated by the entitled
shareholders. Therefore, all shareholders are requested to provide their valid bank account details (if it is not
provided earlier) in the “Dividend Mandate Form”, provided below at the earliest. Shareholders maintaining
shareholding under Central Depository System (CDS) are advised to submit their bank mandate information
directly to the relevant participant / CDC Investor Account Service.
Further, as per provisions of Sub-Section 2 of Section 244 of the Companies Act, 2017, any dividend and / or
share certificate which remain unclaimed or unpaid for a period of three years from the date these have become
due and payable, the Company shall be liable to deposit those unclaimed / unpaid amounts with the Federal
Government.
Bank's Name
CNIC No.
Cell Number & Email
It is stated that the above mentioned information is correct. That I will intimate the changes in the above
mentioned information to the Company and the concerned Share Registrar as soon as these occur.
Folio No.
PROXY FORM
I / We ______________________________________________________________________________________
of _________________________________________________________________________________________
being member(s) of Atlas Battery Limited holding _______________________________ ordinary shares
as per Folio No. _______________ and / or CDC Account No. ________________________ hereby appoint
___________________________________________________________________________________________
of ______________________________________________________________________________________
Folio No. _______________ and / or CDC Account No. ______________________________ or failing him
/ her ________________________________________________________________________________________
of ________________________________________________________________________________________
Folio No. _______________ and / or CDC Account No. _______________________________ as my / our
proxy to attend, act and vote for me / us and on my / our behalf at the Annual General Meeting of the
Company to be held at 9:30 a.m. on Thursday, September 27, 2018 at 2nd Floor, Federation House,
Sharae Firdousi, Clifton, Karachi and at every adjournment thereof.
Affix
Revenue
Witness:
Stamp
Signature ____________________________________
Name _______________________________________
Signature of
CNIC or Passport No. _________________________ Member(s)
Note:
• A member entitled to attend and vote at the Annual General Meeting is entitled to appoint another
member as a proxy to attend, act and vote on his / her behalf. Proxies in order to be effective must
be received at the Registered Office of the Company or at the office of our Share Registrar
M/s. Hameed Majeed Associates (Private) Limited, Karachi Chambers, Hasrat Mohani Road, Karachi
not less than 48 hours before the time of the meeting.
• CDC shareholders and their proxies are requested to attach an attested photocopy of their Computerized
National Identity Card (CNIC) or Passport with this proxy form before submission to the Company.
AFFIX
The Company Secretary, POSTAGE
Atlas Battery Limited,
4-C, Khayaban-e-Tanzeem,
Tauheed Commercial,
Phase V, D.H.A,
Karachi.
Towards
8
Excellence
Annual Report